Depreciation, passive activity rules, material participation and like-kind exchanges. Real estate has more genuinely valuable tax planning available than almost any other asset class, and more ways to forfeit it by filing on autopilot.
Fixed fees, quoted in writing. Florida licensed CPA.
Get these right and the rest is bookkeeping.
Rental activity is passive by default under Section 469. Passive losses generally cannot offset wages or business income, so a paper loss you were counting on may simply suspend until you sell.
Qualifying requires more than half your personal services in real property trades or businesses and more than 750 hours, plus material participation in the rentals. Contemporaneous time records are what wins or loses this in examination, and reconstructed logs routinely fail.
Cost segregation with bonus depreciation can pull large deductions forward. On sale, depreciation recapture is taxed at a different rate than capital gain.
Investors, short-term rental operators, agents and small developers.
How to hold property across LLCs, when separate entities are worth the administrative cost, and how the structure interacts with financing, liability and your eventual exit.
Whether a study is worth commissioning on a given property, how bonus depreciation applies in the current phase-down, and modeling the recapture consequence before you rely on the deduction.
Where average guest stay is seven days or less, the activity is not automatically a rental under the passive loss rules, which changes the participation analysis entirely. It also raises occupancy and sales tax questions in Florida.
Coordination with your qualified intermediary on the 45-day identification and 180-day closing deadlines, and the basis and depreciation consequences that follow you into the replacement property.
Commission income is self-employment income. Entity structure, S corp timing, reasonable compensation and quarterly estimates on income that arrives in unpredictable lumps.
Financials per property and in the aggregate, with the basis schedules and improvement records that determine your gain on sale years from now.
Connected properly, so your books close on live data instead of month-old statements. Where we hold a certification, we say so.
General information, not advice for your situation. Outcomes depend on facts we would need to review with you.
“Philip is more than our CPA, he is part of our team. He is proactive, incredibly responsive, and always thinking ahead about our business and taxes.”
Usually not, without qualifying for an exception. Rental activity is passive by default and passive losses are generally limited to passive income. There is a special allowance of up to $25,000 for active participants that phases out at higher modified adjusted gross income. Real estate professional status is the main route out for higher earners, and it is a demanding test. Short-term rentals sit in a different category because an average stay of seven days or less means the activity is not treated as a rental for these purposes at all.
It depends on the property basis, your marginal rate, whether you can actually use the resulting loss given the passive activity rules, and how long you intend to hold. A study that generates a large suspended passive loss you cannot use for eight years is a much smaller win than the sales pitch suggests. We model it before recommending it.
If the average period of customer use is seven days or less, the activity is excluded from the definition of a rental activity under the passive loss regulations. That means it is evaluated as a trade or business, and if you materially participate, losses may be non-passive. Material participation still has to be met and documented. It is a legitimate position that is frequently claimed without the participation actually being there.
Often yes once commission income is consistent, because it can reduce self-employment tax on the distribution portion. It requires real payroll and a defensible salary. Commission income is lumpy, so we also look at whether your quarterly estimates are being calculated properly rather than copied from a year that looked nothing like this one.
Yes, and the reverse as well. Florida has no personal income tax, so many of our clients have no state filing here, but property in other states generally creates a filing obligation there.
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