This can help offset some of the tax impact of the $100k distribution, depending on the details of your situation.For question 2 – When it comes to funding deals using an SDIRA or Solo 401(k), especially involving a note with a relative, there are strict IRS rules regarding disqualified persons and prohibited transactions.

You're absolutely right, Rohullah, cost segregation is often pitched as a no-brainer, but the recapture piece gets glossed over way too much.A simple way I explain it to clients is: “It’s a way to get big tax savings now, but when you sell, the IRS wants a portion back.

Your CPA is correct.Rental Real Estate income is generally considered passive.If your income is below $150,000, the IRS allows some passive losses against other income such as wages, interest, dividends, etc.Once your income is above $150,000, you can't offset the two unless you can claim real estate professional status.Best of luck

@Patrick Shep, One of the requirements of the 1031 exchange is that the taxpayer for the relinquished property has to be the same taxpayer for the replacement property.The way the LLC is structured would determine if this would work.

IRS Publications are fine for basic tax questions.

Hi @Todd Goedeke - The IRS looks at your total hours of participation across all activities, not whether you did 50% of each individual task like cleaning or landscaping.

The IRS bases bonus depreciation eligibility on the placed-in-service date, not when the land was bought or construction started.The placed-in-service date is when the property is ready and available for use — typically the day you receive the Certificate of Occupancy (CO) or when you first list it for rent, whichever comes first.

I want to ensure this is done in a way that complies with California law, avoids triggering partnership tax treatment, and doesn’t lead the IRS or courts to recharacterize the arrangement as equity.

The main thing is to keep detailed proof of your hours and guest stays so you can show the IRS you really qualify, this is where people mess up.

. - Because you purchased the land and signed the construction contract in 2024, the IRS generally considers the property "acquired" in 2024, even if it won’t be placed in service until 2025.