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Posted Tuesday, October 1, 2024
Table Of Contents
Rental Tax Deductions
Real estate investment is one of WCG CPAs & Advisors core competencies, and as such we get asked a bunch of questions on rental property tax deductions.
STR Loophole
Everyone loves loopholes, right? The short-term rental loophole requires 7 day guest stay average and material participation.
Cost Segregation Study
When you buy real estate for business or rental use, you can accelerate components of the building faster than others.
Real Estate Professional (REPS)
There are three thresholds needed for real estate professional status and your rental losses are no longer limited.
Repairs v Improvements
This is the million dollar question at times. Can I deduct immediately? Or do I depreciate over time?
Accelerated Depreciation
Generally, there are two ways to compress time and hurry the tax benefits when you purchase and deploy certain property.
Tax Planning Strategies
Tax planning strategies are commonly addressed in December as small business owners and other taxpayers start to freak out…
Rental Holding Co
WCG CPAs & Advisors encourages short-term rentals to be owned by partnerships (ie, a multi-member LLC). Why? For three reasons-
Holding Co Tax Prep
Beyond complexity and tax footprints, your fee also depends largely on the quality of your accounting records.
Rental Property Tax Prep
Rental properties can be great investments and offer some ways to shelter your taxable income through rental deductions.
LLC (Sched C) Tax Prep
Proper small business tax preparation and planning, recordkeeping of your business tax deductions and money handling is a must.
Tax Prep Checklist
The quality of your tax return and the timeliness of its preparation depend strongly on obtaining all your tax documents and information.
Rental Property Template
We have created a nice template in Excel to present your rental property activities including acquisition and setup.
Common Expenses
The following is a list of common rental property tax deductions. Some of these are short and sweet while others have an entire section to themselves
Tax Reduction Strategies
One of our primary focuses at WCG is ensuring you are paying the least amount of taxes allowed by law.
Investor Patrol Services
WCG has a specific advisory platform for our rental property owners and real estate investors- Investor Patrol!
Get Started!
Here is a quick list of the necessary steps to have WCG CPAs & Advisors prepare your individual tax returns. Important dates and considerations during the tax extension season-
Multi-Entity Arrangements
Let’s say you have rental properties in Montana, Colorado and Texas. For all the benefits of using an LLC to own your rental property…
Rental Property As A Business
We consider rental property investments and other real estate activities to be a business in the purest sense. Why?
Material Participation Rules
Material participation is one the most scrutinized and talked about topics among real estate investors and rental property owners.
State Issues With Rentals
It is easy and common to overlook rental property and real estate investment nuances at the state level. Here are some random considerations-
Vacation Home Rules
It is common to have a second home that you rent out. It is also common to have a rental property that you use personally.
Travel Deductions
Let’s talk about deducting your rental property travel expenses ahead of others. Sure, accelerated depreciation or repairs versus improvements are class favorites
1031 Exchange
When you sell a rental property, either as an investment or as a business, you can invoke IRC Section 1031 to fully defer your capital gains tax
Repairs Safe Harbors
There are 3 separate safe harbors for repairs to help rental property owners deduct the costs.
I Just Got A Rental, What Do I Do?
I just got a rental, what do I do? Purchasing a rental property is certainly challenging, but operating one to build wealth and find tax efficiency is equally challenging. This is our second book. Our first book, Taxpayer’s Comprehensive Guide to LLCs and S Corps, was first published in 2014 and was well-received by small business owners and tax professionals, so we thought a book on rental properties and real estate investments would be equally helpful. So, here we are with our first iteration, or the 2024-2025 edition. We plan to update annually.
Our rental property book starts with entity structures and moves into asset management such as acquisition, cost segregation, rental safe harbors, repairs versus improvements, accelerated depreciation, partial asset disposition, and 1031 like-kind exchange. From there we discuss various rental considerations like passive activity losses, short-term rental loophole, real estate professional status, and material participation including what time counts, and what time doesn’t count.
Finally, the good stuff! Rental property tax deductions such as travel, meals, automobiles, interest tracing, home office and common expenses. Fun!
It is available in paperback for $19.95 from Amazon and as an eBook for Kindle for 15.95. Our book is also available for purchase as a PDF from ClickBank for $12.95. This book is written with the general rental property in mind. Too many resources tell you the general rule but don’t bother to back it up with Internal Revenue Code, Treasury Regulations and Tax Court cases. Our book lays it all out, explains the madness, adds some humor and various conundrums.
Enjoy! And please send us all comments, hang-ups and static. This book is as much yours as it is ours, except the tiny royalty part- that’s ours. Stop by and we’ll buy you a beer with the pennies.
Table Of Contents
Tax Planning Season
Tax planning season is here! Let's schedule a time to review tax reduction strategies and generate a mock tax return.
Bookkeeping Services
Tired of maintaining your own books? Seems like a chore to offload?
Chat With a Tax Pro
Taxes are complicated. We make them simple. Get in touch with a pro here at WCG!