Here’s an excerpt (see below) from the IRS Audit Technique Passive Activity Guide on this rule, which covers more than just the 100 hours. 

The IRS and credit bureaus don’t share that kind of direct reporting link.It’s one of those “behind-the-scenes” structuring advantages that can help investors scale — as long as it’s done right. 

Just make sure you’ve got some backup (photos, estimates, etc.) so if the IRS asks, you can show how you came up with the numbers.So yes, you can bonus in 2025 and still demo in 2026 with no problem—the tradeoff is whether you’d rather have a bigger upfront bonus depreciation now, or a bigger demolition loss later....This post does not create a CPA-client relationship.

These answers will determine how much cash you can actually pull from House A.  

The BEA’s estimates use incomplete data in an effort to inform policymakers, businesses, and the public quickly, but as more information trickles in, or is lagging or is from a survey that was underrepresented (from sources like the Census Bureau or IRS), revisions refine the picture.

Looking for a mentor to help us determine some good markets, strategies, etc.Thanks in Advance!

Depending on how the contract is structured, the timing of the gain can be impacted as the IRS may require you to recognize the full gain upfront or spread it out as you receive the payments. 2) If you're serious about a 1031, I'd connect with a qualified intermediary well ahead of time.

In the real estate world, I encountered numerous challenges that tested my resilience and determination.

The structure is as follows:I receive the property as a gift, based on its appraised valueWe sign a promissory note for that value, with the intent to pay it off at refinanceI assume operational control immediately and take the lead role in managing the assetI’m modeling this as a hybrid between a gift transfer and a seller carry, and I want to ensure:The promissory note is compliant with IRS rules to avoid imputed interestWe’re not triggering unintended capital gains exposure on either sideThe deal protects both parties in case of default or delayed refinanceIf anyone has experience with family-based seller financing, promissory note structuring, or tax overlays in hospitality or real estate, I’d love your input.

And if you're not careful you run afoul of the IRS, which I think is a problem, too.