The IRS treats single-member LLCs as disregarded entities (they’re taxed the same as if you held the property personally).

You can take bonus depreciation on any property that has assets that qualify.So to answer your question, yes, you can take bonus depreciation on components of a house that is used as a MTR.However, what you may want to determine from a conversation with an accountant is whether the activity will be treated as active or passive.The next question would be, even if you can do a cost segregation study, would the added depreciation from bonus depreciation be beneficial.

Purchase Price: $185KSeller Credit: $20K applied toward rehab at closingEffective Net Purchase: $165KARV (conservative): $220K – $230KRehab Budget: ~$20K–$25K (HVAC, bathrooms, floors, cosmetics)Exit: Refi into DSCR or conventional in 12–18 months  I’m trying to confirm with lenders how the $20K seller credit will be treated: Will hard money lenders allow this structure and apply the credit directly to rehab?

For tax purposes, when you live in one unit and rent out another, it’s really treated as if you own two separate properties: one personal and one rental.

Not sure how the IRS treats primwry homes owned by multiple people who a rent all treating it as their primary.

In this situation, where there is no W-2 job or other earned income, the net income from real estate operations could be treated as subject to self-employment tax (FICA).It is therefore essential to maintain accurate and detailed records documenting your level of participation, income, expenses, and management activities.

Section 469(c)(7) provides an exception that allows qualifying taxpayers to treat rental real estate activities as nonpassive, enabling them to deduct losses against other types of income.

Hey @Andrew Guzman, I’ve seen HELOCs work well for live-in flips, just treat it like an investment loan.

The price you pay for the higher returns is that you have to hire a tech to treat it at least weekly, not just "when you have a problem."

If you get additional basis during 1031 because you did a bigger purchase, the added basis is treated as a new depreciable basis.