-based partner (EAD or Green Card holder) handling day-to-day operations or listed as managing member in the LLCWhere We Stand:Budget: We have $100K in cash availableExploring whether to build, renovate an existing property, or use modular/tiny home containers on commercial landActively researching commercial properties and land in North AustinOpen to buying, leasing, or ground-up development — whichever is best suited to our legal and financial positionLooking for Help With:Business + ownership structure: How can we legally structure this as passive TN visa holders, while using a U.S.

This is the wording that was included in the buyers agreement:"If Buyer enters into an Acquisition agreement during the Term due to the efforts of Buyer’s Agent but fails to complete the transaction in accordance with the material terms of the transaction agreement, Buyer will pay $2,000 to Firm as liquidated damages.

This means the income and losses aren’t automatically considered passive.If you or your spouse materially participate—either by spending 100+ hours and more than anyone else (including cleaners or managers), or by putting in 500+ hours total—you may be able to treat STR losses as non-passive and use them to offset W-2 income.

Option A: Do it Now (Pre-Renovation)Pros: Start depreciation soonerUseful if: You're placing the property in service now and want tax deductions this yearCaution: Renovations done later may require separate tracking or a second studyOption B: Wait Until After RenovationsPros: Larger total basis to depreciate; eligible for 100% bonus on both inherited and newly added personal propertyUseful if: Renovations are substantial and can be completed soonOption C: Do BothIn some cases, your CPA may recommend:An initial cost seg on the inherited structure (to begin depreciation)A follow-up cost seg after placing major improvements in serviceTax Benefits — Including Bonus Depreciation and Partial Dispositions100% Bonus Depreciation (2025)Applies to personal property with useful lives under 20 years (e.g., carpeting, appliances, HVAC, fencing, landscape lighting).

(a) Subject to any restrictions on transferability under applicable law, or contained elsewhere in this Agreement, each Member may assign some or all of the Interest of such Member.

The information contained in this post is not to be relied upon.

Adjusted Basis May Include Improvements and Selling CostsYour adjusted basis is not just your original purchase price, it includes:Major capital improvements (e.g., roof, HVAC, not repairs)Certain acquisition costsLess any depreciation you claimed (or were eligible to claim) if the property was rentedIf the property was a rental, even without gain, you may still owe depreciation recapture tax, which is taxed at 25% on the total depreciation taken.3.

The IRS allows you to deduct rental expenses and depreciation whether the property is held in your name or in an LLC—as long as it’s used as a rental business.Here’s what you need to know:Tax Benefits You Can Still Claim PersonallyEven without an LLC, you can still claim:Depreciation (including cost segregation and bonus depreciation if applicable)Mortgage interestProperty taxesRepairs, maintenance, insuranceTravel, utilities, cleaning, furnishings, supplies, etc.If you materially participate and meet the STR exception (average stay ≤ 7 days and 100+ hours of active participation), the income is treated as non-passive and losses may offset your W-2 income.

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So your repair costs are included in the home value that you depreciate and they lower your taxes on the rental income.