Since its a permitted 3 BD, see if you can have that 4t BD turned into office/bonus room etc.

The STR Loophole + 100% Bonus Depreciation means:If you buy a qualifying STR and materially participate, you can immediately write off a huge portion of the property’s cost in Year 1.These losses offset your W-2 income, unlike regular passive rental losses for qualified properties placed into service as of January 19th 2025. 🧮 Key Takeaway- Without the loophole, you’d only offset passive income.- With the loophole + 100% bonus depreciation, you offset active high W-2 income — slashing your tax bill in Year 1.📌 Big PictureWho wins?

On the “5th Bedroom”For an appraiser (and lenders), a bedroom usually needs:Legal egress (window/door to outside in case of fire).Heat source.Proper electrical.Adequate ceiling height.If your “bonus room” meets those standards, you can argue it’s a true bedroom.

I have all long term rentals, did 27.5 straight line depreciation, no cost segregations, no accelerated deprecation, no bonus depreciation. no C-Corps and no S-Corps.

It involves using Section 179 or bonus depreciation, and I would not DIY this project, as distinction between repairs and capital improvements is one of the most confusing areas of the tax law.And no, you do not need a cost segregation study to deduct these components of your rehab - if you have itemized invoices and receipts.Myth 8: for a valid 1031 exchange, I must exchange STR for another STRNo, you don't.

Honestly, we should have been easy clients - we came to him with a plan in place wanting his help on claiming REP status, setting up a cost segregation for a rental property bought and functioning in 2022, so that we could file for 100% bonus depreciation for that tax year.

As you mentioned effectively the same reason no bonus on inherited basis as well. 

We don't expect appreciation on our investments, however any appreciation that we gain is a bonus; we underwrite as if we are selling for the same we paid.

Same goes for tax benefits...I'm on my 3rd live in flip and have done cost segs/bonus depreciation for STRs.

You waited this long to get into contract - don't wait on paying for the appraisal (maybe even pay $50 extra) to get them there ASAP and bonus - it is a check and balance on terms.