I was lucky enough to have a small penny stock I was allocated to hit and used my real estate passive losses to make my gain tax free :) Sometimes we get lucky! 

Hidden behind the balance between cash flow and ROI for rehab, I also made actual money on what I allocated for maintenance, repairs, management, and reserves, as underwritten because I had 1031 before spending those funds.I have completed eight 1031s since, and have used contractors for capex, with significantly higher returns on the value... mainly because these are now commercial-type loans, not residential.

If you want to change to cost seg allocations in 2023, the 3115 essentially calculates what amount would have been taken in prior years had the cost seg allocation been used for those years, then it backs out what was actually taken to arrive at the catch up amount (called a 481(a) adjustment).

Within the Inflation Reduction Act that was just passed a couple weeks ago, the IRS just allocated $78 billion to hire 87,000 new IRS employees.

It serves as a designation for professionals actively involved in the oversight and operation of their rental portfolios.Summary of Requirements:To qualify for Real Estate Professional Status, investors must fulfill two key criteria:50% Rule: Allocate over 50% of all annual personal service hours to real property trades or businesses.750-Hour Threshold: Spend more than 750 hours materially participating in specified real property activities, including rental operations.Navigating these criteria demands meticulous attention to detail and a thorough understanding of IRS regulations.

The IRS has tiers of accepted cost allocation techniques for real estate - a total of 6 tiers! 

You will allocate many of your deductions between Schedule E and Schedule A.

That said, given my fact pattern of a condotel- how do I even try to allocate each individual who might be employed by the management company vs the number of units in the building.

@Will Gaston I would suggest you at least get it inspected and see what the worst case number would be and then reassess.I would reevaluate numbers - if you bring in $8900 per month, and have to allocate the recommended 50% in expenses, and $3300 in PITI, you are bringing in $1150 with so many properties to deal with. 

Hello,You should have the security deposit allocated to a specific business account.