Resources

Plain-language notes on deadlines, deductions, and decisions for real estate investors, landlords, and homeowners — written for clients, not other accountants.

1. Sep 15, 2026Exchanges

   1031 Exchanges: How the Timeline Actually Works

   A 1031 exchange can defer real gain — but the clock starts the moment you close on the sale, and it doesn't pause for anyone.

   A 1031 exchange lets you defer capital gains tax when you sell an investment property, as long as you reinvest the proceeds into another "like-kind" property under the rules. The tax benefit is real, but it comes wrapped in a strict timeline that trips up more people than the eligibility rules themselves.

   From the day your sale closes, you have 45 days to formally identify potential replacement properties in writing, and 180 days total to close on one of them. Both windows run in calendar days, not business days — weekends and holidays count, and there's no extension for "we found the right property, just a week late."

   The proceeds from the sale can never touch your hands or your regular bank account in between — they need to sit with a qualified intermediary for the duration of the exchange. Even a brief moment of control over those funds can disqualify the whole exchange, which is why the intermediary needs to be lined up before your sale closes, not after.

   The identification step is where we see the most last-minute scrambling. Because 45 days moves faster than people expect, it's worth starting to scout replacement properties before your current sale even closes, so you're not searching cold once the clock starts.

   Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
2. Sep 2, 2026Deductions

   Depreciation on Rental Property, Explained

   Depreciation is one of the few deductions that reduces your taxable income without costing you any cash.

   When you own a rental property, you can't deduct the full purchase price in the year you buy it. Instead, the building's value (not the land underneath it — land isn't depreciable) gets spread out and deducted gradually over a set recovery period.

   This matters because it's a deduction that doesn't require spending any money that year — it can turn a property that's cash-flow positive into one that shows a paper loss for tax purposes, which is a meaningful planning tool if you also have other rental or passive income to offset.

   The split between land and building value at purchase isn't arbitrary, and getting it wrong in either direction has consequences — too much allocated to the building overstates your deduction; too little leaves money on the table. We typically look at the property tax assessment or an appraisal to support a defensible split.

   The trade-off shows up later: when you sell, the depreciation you claimed is "recaptured" and taxed, often at a different rate than ordinary capital gains. It doesn't make depreciation a bad idea — the deferral is usually still worth it — but it's worth knowing that bill exists before it arrives.

   Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
3. Aug 18, 2026Rentals

   Short-Term Rentals: When the Rules Change

   A property listed on a short-stay platform isn't automatically taxed like a traditional rental.

   Traditional rental income is generally treated as passive, which limits how much of a rental loss you can use to offset other income unless you qualify as a real estate professional. Short-term rentals can work differently, and the difference hinges on something easy to overlook: how long guests typically stay.

   If the average guest stay is short — roughly a week or less — the activity can be treated more like operating a hotel than owning a passive rental, especially if you're also providing meaningful services (cleaning between stays, concierge-style guest support). That reclassification can open up the ability to use losses against other income, but it can also expose the income to self-employment tax depending on how involved you are.

   Material participation is the other lever. If you're materially involved in operating the property — not just collecting a check from a management company — the tax treatment can shift further. The specific hours and involvement thresholds matter here, and they're worth confirming against your actual calendar rather than estimating.

   None of this is a reason to avoid short-term rentals — it's a reason to talk through how a specific property is being run before assuming it's taxed the same way as the rental down the street.

   Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
4. Aug 5, 2026Planning

   Selling Your Primary Residence: The Exclusion You Might Be Missing

   If you've lived in the home you're selling, a large chunk of the gain may never be taxed at all.

   When you sell your primary home, a significant amount of the gain can be excluded from tax entirely — up to $250,000 for a single filer, or $500,000 for a married couple filing jointly — which is a meaningfully larger break than most other capital gains provisions offer.

   To qualify, you generally need to have owned and lived in the home as your primary residence for at least two of the five years before the sale. Those two years don't need to be continuous, which surprises people who assume a temporary move disqualifies them.

   This is where it gets easy to miscalculate: if the property was a rental at any point before becoming your primary residence, or if you've used the exclusion on a different home sale within the last two years, the amount you can exclude may be reduced. It's worth reviewing the property's history with us before assuming the full exclusion applies.

   If you're planning a sale and the timing is flexible — for instance, you're close to hitting the two-year mark but not quite there — it's worth having that conversation before listing the property, not after the sale closes.

   Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
5. Jul 22, 2026Status

   Real Estate Professional Status: What It Actually Takes

   Qualifying can unlock rental losses that would otherwise sit stuck on your return.

   Rental losses are generally limited to offsetting passive income, not wages or other active income, unless an exception applies. Real estate professional status is the broadest exception — but it's judged by hours, not by how you describe your career.

   Two tests have to be met: more than half of your total working hours across every trade or business you're involved in must be in real property trades or businesses, and you need at least 750 hours total in those activities during the year.

   That first test is the one that disqualifies most people. If you hold a full-time job outside real estate, those hours almost always outweigh whatever time you spend on your rentals, no matter how many properties you own.

   Even after qualifying, you still need to show material participation in each property individually (or make a grouping election to treat them as one activity) — and the most common way this falls apart under scrutiny isn't the hours themselves, it's the absence of contemporaneous records showing how they were spent.

   Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
6. Jul 10, 2026Deductions

   Cost Segregation: Speeding Up Your Depreciation

   Instead of depreciating a whole building over decades, a cost segregation study pulls pieces of it into much shorter recovery periods.

   Normally, a rental building depreciates slowly — 27.5 years for residential property, 39 for commercial — with land value excluded from the calculation entirely.

   A cost segregation study breaks a property into its components: flooring, certain electrical and plumbing tied to specific equipment, land improvements like paving or fencing. Many of these pieces qualify for far shorter recovery periods — 5, 7, or 15 years instead of decades.

   The effect is a significantly larger depreciation deduction in the early years of ownership, which can offset other income now rather than spreading a small benefit thin over a long time.

   The trade-off: it's a formal, engineering-based study, not a spreadsheet exercise, and it tends to make the most sense on properties above a certain value where the study cost is clearly worth it. It also increases depreciation recapture exposure when you sell — which pairs naturally with exit planning, including a 1031 exchange. Worth a conversation before assuming it's automatically the right move on a given property.

   Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
7. Jun 28, 2026Ownership

   LLC vs. Personal Name: How You Hold Title Affects Your Taxes

   Holding a property in an LLC changes your liability exposure more than your tax bill.

   A single-member LLC holding rental property is, by default, invisible to the IRS — treated as a disregarded entity, meaning the tax return looks essentially the same as if you owned the property personally.

   The liability protection is real, and it's often the main reason to use an LLC in the first place. But on its own, it doesn't change how the income is taxed.

   Where it does matter: a multi-member LLC — with a partner, or a spouse in some states — generally has to file a separate partnership return, adding complexity and a filing deadline that lands earlier than your personal return.

   Financing can complicate things too: some lenders price loans differently, or restrict certain loan products entirely, when title sits with an LLC instead of a person. And if you're considering moving an existing property into an LLC, it's worth talking through timing first — the transfer can trigger a property tax reassessment in some jurisdictions, and can affect financing tied to the original owner.

   Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
8. Jun 12, 2026Deductions

   The Qualified Business Income Deduction and Rental Property

   Rental income can qualify for one of the more generous deductions available, if the activity rises to a trade or business.

   The qualified business income deduction lets eligible owners deduct a portion of certain business income before it's taxed, and rental real estate can qualify — but only if the activity is run like a trade or business, not treated as a passive investment sitting quietly in the background.

   The IRS has offered a safe harbor for rental real estate: generally, 250 hours or more per year of rental services (performed by you, employees, or contractors), along with separate books and records, supports treating the activity as a qualifying business.

   A single triple-net-lease property, with a tenant who handles nearly everything, is the case most likely to fall outside that safe harbor — the less involved you or someone on your behalf are in actually running the property, the shakier the qualification becomes.

   This is worth confirming for each tax year rather than assuming it from a prior one, since your level of involvement in a given property can change year to year.

   Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
9. May 30, 2026Planning

   Passive Activity Losses: Why Your Rental Loss Might Be Stuck

   A loss on paper doesn't always mean a deduction this year.

   Rental real estate is generally treated as a passive activity, which means losses from it can typically only offset passive income — not your wages or other active income — unless an exception applies.

   There's a narrower exception for active participation in a rental (a lower bar than real estate professional status) that can allow a limited amount of loss against other income each year, but it phases out as income rises.

   A loss that can't be used this year isn't lost forever. It carries forward and can offset passive income in future years, and the full remaining loss becomes usable in the year you sell the property outright.

   This is why the timing of a sale matters beyond the gain itself — selling a property can "free up" losses that have been stuck for years. It's worth checking your suspended losses before assuming a sale year will owe more than it actually will.

   Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
10. May 14, 2026Deadlines

    1099s You Might Owe as a Landlord

    If you paid a contractor to fix the roof, the IRS generally wants to know about it.

    If your rental activity rises to the level of a trade or business and you paid an unincorporated contractor $600 or more during the year for services — repairs, lawn care, cleaning between tenants — you generally need to issue that contractor a 1099.

    The deadline to send these out is at the end of January, notably earlier than most other tax deadlines. It's one of the easiest ones to miss simply because it doesn't feel like tax season yet.

    Getting a completed W-9 from any contractor before you pay their first invoice saves a scramble in January — chasing down a contractor's tax ID after the year has already closed is far harder than asking for it up front.

    Payments made by credit card or through a third-party platform are typically excluded from this requirement, since the processor handles separate reporting of its own. But paying by check, cash, or direct transfer generally puts the reporting responsibility on you.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
11. Apr 30, 2026Deductions

    Capital Improvements vs. Repairs: Why the Difference Costs You

    A repair is deductible right away. An improvement isn't — and mixing the two up is one of the most common ways landlords misreport their own expenses.

    The IRS draws a real line between a repair (keeps the property in its normal operating condition — patching a leak, repainting a wall, fixing a broken appliance) and an improvement (makes the property better, restores it after significant damage, or adapts it to a new use). Repairs are deductible in full the year you pay for them; improvements have to be capitalized and depreciated over time instead.

    The trouble is that many projects blur the line. Replacing a few shingles after a storm is a repair; replacing the entire roof is an improvement, even if the reason you did it was damage. The same logic applies to flooring, HVAC systems, and plumbing — replacing a section is often a repair, replacing the whole system usually isn't.

    There's a safe harbor that helps smaller landlords: routine maintenance expected to happen more than once during the property's life, and expenses under certain per-item thresholds, can often be deducted immediately even if they'd technically qualify as improvements. It's worth knowing this exists rather than assuming every mid-size expense has to be depreciated.

    Getting this wrong in either direction has a cost — overstating repairs risks disallowed deductions if questioned; treating an actual repair as a capital improvement means waiting decades to get a deduction you were entitled to take now. When a project is borderline, it's worth flagging it to us before you file, not after.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
12. Apr 16, 2026Rentals

    The Vacation Home Rules: When Personal Use Limits Your Deductions

    Rent it out and use it yourself, and the tax rules split depending on which side of a fairly specific line your personal use falls on.

    A property you both rent out and use personally gets classified based on how many days fall into each bucket. If your personal use exceeds 14 days a year, or 10% of the days it's rented at fair value (whichever is greater), the IRS treats it as a personal residence with rental use — not a rental property — and that changes what you can deduct.

    Under that classification, rental losses generally can't offset your other income; deductions are limited to the amount of rental income the property brought in. Cross below that personal-use threshold, and it's treated as a true rental, where losses can potentially offset other income depending on your participation level.

    Days spent doing repairs or maintenance don't count as personal-use days, even if you enjoy the property while you're there working on it — but a family member using it rent-free generally does count against you, even if you personally were never there that day.

    If you're near the line, the number of days matters enough to actually track deliberately rather than estimate at year-end. A property that crosses into or out of personal-residence treatment from one year to the next can see a meaningfully different tax outcome even with identical income and expenses.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
13. Apr 2, 2026Deductions

    Depreciation Recapture: The Bill That Waits Until You Sell

    The depreciation you claimed every year doesn't disappear when you sell — it comes back due, often taxed differently than the rest of your gain.

    Depreciation lowers your taxable income while you hold a rental property, but when you sell, the IRS wants some of that benefit back. The portion of your gain that corresponds to depreciation you claimed (or could have claimed, whether you did or not) is "recaptured" and taxed at its own rate, separate from ordinary long-term capital gains.

    This recapture rate is generally higher than the typical long-term capital gains rate on the rest of your profit, which is why a sale that looks like a straightforward capital gain on paper can carry a noticeably different tax bill once recapture is factored in.

    The recapture applies whether or not you actually claimed depreciation on your returns — the IRS calculates it based on what you were allowed to claim, not what you chose to. Skipping depreciation to "avoid" this issue doesn't work, and it also means giving up a real deduction for years, for no tax benefit later.

    This is one of the most overlooked numbers when estimating what a sale will actually net you, especially after several years of ownership. Before listing a long-held rental, it's worth having us model out what a sale actually looks like after recapture, not just the surface-level gain.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
14. Mar 19, 2026Planning

    Installment Sales: Spreading a Gain Across Years

    Selling a property and collecting payments over time can spread the tax bill out too — but the mechanics take some getting used to.

    If you sell a property and the buyer pays you over multiple years rather than all at closing, an installment sale lets you generally report the gain proportionally as you receive each payment, rather than owing tax on the full gain in the year of sale.

    This can meaningfully smooth out your tax bill, especially useful if a lump-sum gain would otherwise push you into a much higher bracket for one year. Interest charged on the deferred payments is taxed separately as ordinary income, on top of the gain itself.

    Depreciation recapture is an exception worth knowing: it generally has to be reported in full in the year of sale, regardless of how the rest of the gain is spread out over the installment period. That upfront tax bill can catch sellers off guard if they assumed everything would be deferred proportionally.

    This approach isn't automatic — it requires structuring the sale correctly from the start, and it comes with real risk if the buyer stops paying partway through. Worth discussing with us before the purchase agreement is finalized, not after.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
15. Mar 5, 2026Exchanges

    Opportunity Zones: Still Relevant for Real Estate Investors?

    Investing capital gains into a Qualified Opportunity Fund can defer and potentially reduce the tax on those gains — if the property and the timeline both line up.

    Opportunity Zones let investors defer tax on a capital gain by reinvesting that gain into a Qualified Opportunity Fund within a set window after the sale that generated it, generally 180 days. The fund then has to invest substantially in property or businesses located in a designated zone.

    The appeal is twofold: the original gain's tax is deferred, and if the new investment is held long enough, appreciation on the new investment itself can potentially be excluded from tax entirely when eventually sold.

    The catch is the holding period required to get the full benefit is long — measured in years, not months — and the investment has to meet ongoing substantial-improvement and use requirements to keep its qualified status. An investment that sounds appealing on the deferral alone can fall short if it doesn't hold up structurally over time.

    This is a strategy that needs to be evaluated on the specific fund and property, not just the tax mechanics in the abstract — talk to us before committing a gain to a fund, since the deadline to act is shorter than most people expect once a sale closes.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
16. Feb 19, 2026Status

    Self-Rental Rules: Renting Property to Your Own Business

    Renting a property you own to your own business runs into a special set of rules most landlords don't expect.

    If you own a property and rent it to a business you materially participate in — even a business you don't own outright, just actively work in — the IRS applies "self-rental" rules that can recharacterize what would otherwise be passive rental income as non-passive.

    The effect cuts one direction only: rental income from a self-rental is treated as non-passive (so it can't be offset by passive losses from your other properties), but a rental loss from a self-rental arrangement is still treated as passive. It's a rule designed to prevent using a self-rental loss to offset unrelated active income, without giving the same flexibility on the income side.

    This surprises people who set up a self-rental specifically to create a loss to offset business income elsewhere — the structure often doesn't work the way it's assumed to. It's worth modeling the actual tax effect of a self-rental arrangement before setting the rent amount or lease terms.

    If you're already in a self-rental arrangement, it's worth a review to confirm your returns are reflecting the income correctly, since this is one of the more commonly misapplied provisions in this area.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
17. Feb 5, 2026Ownership

    K-1s and Real Estate Syndications: What Passive Investors Should Expect

    Investing passively in a syndication means someone else runs the property — but you still need to understand the K-1 that shows up every spring.

    A real estate syndication pools investor capital to buy a property, typically structured as an LLC or limited partnership. As a passive investor, you generally receive a Schedule K-1 each year reporting your share of the partnership's income, losses, and other tax items — not a simple 1099.

    K-1s tend to arrive later than other tax documents, sometimes well into filing season, which is worth planning around if you're used to filing early. An extension is common and not a red flag when K-1s are involved.

    The loss reported on a K-1 from a syndication is generally still subject to the same passive activity limitations as any other rental loss — it doesn't automatically become usable against your wages just because you invested through a partnership rather than owning the property directly.

    Depreciation is often front-loaded in these deals (frequently through a cost segregation study on the property), which can mean a larger loss allocation in early years than later ones. It's worth understanding this pattern going in, rather than being surprised when the tax benefit shrinks in later years of the hold.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
18. Jan 22, 2026Deductions

    Refinancing a Rental: What's Deductible and What Isn't

    Pulling cash out of a rental through a refinance isn't a taxable event — but what you do with the money afterward absolutely matters.

    Refinancing a rental property, including a cash-out refinance, generally isn't a taxable event on its own. Loan proceeds aren't income, and the transaction itself doesn't trigger a gain or loss.

    What does matter is what happens to the interest deduction going forward, and that depends on how you use the cash you pull out. Interest on the portion of a new loan used to improve or maintain the same rental property generally stays deductible as a rental expense. Interest on the portion used for something unrelated — paying off a personal credit card, funding a different property, personal expenses — generally follows the tax treatment of whatever it was used for, not the original rental loan.

    This means a single refinance can end up with interest that's deductible in part and not deductible in part, based purely on where the money went afterward. Keeping clear records of how refinance proceeds were used is what makes that split defensible later.

    Closing costs on a refinance are also usually amortized over the life of the new loan rather than deducted immediately, unlike some costs on an original purchase. Worth reviewing with us at the time of the refinance so the paperwork trail exists when you need it.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
19. Jan 8, 2026Rentals

    Vacant Between Tenants: What You Can Still Deduct

    A rental sitting empty between tenants doesn't stop being a rental for tax purposes — as long as you're still trying to rent it.

    Ordinary expenses on a rental property — mortgage interest, property taxes, insurance, utilities, maintenance — generally remain deductible during a vacancy, as long as the property is still being actively held out for rent and you haven't converted it to personal use or taken it off the market.

    The key test is intent and effort: a property listed with a manager or actively advertised while vacant is different, tax-wise, from one sitting empty while you decide whether to sell it or move a family member in. The second scenario can jeopardize the deductibility of expenses during that period.

    Extended vacancies — well beyond a normal turnover period — sometimes draw more scrutiny on whether the property is genuinely being operated as a rental. Documentation of your marketing efforts (listing dates, showings, communications with a property manager) is worth keeping specifically for periods of longer vacancy.

    If you're using a vacancy to do capital improvements rather than routine repairs, remember those costs get depreciated rather than deducted immediately, regardless of the vacancy — the vacancy itself doesn't change which bucket an expense falls into.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
20. Dec 25, 2025Deductions

    Tracing a HELOC: Why What You Bought With It Matters More Than the Loan Itself

    A home equity line on your primary residence used to buy a rental follows the rental's tax rules, not your home's — but only if you can prove where the money went.

    Interest deductibility for a home equity line of credit depends on what the borrowed money was actually used for, a concept the IRS calls "interest tracing" — not on which property secures the loan. A HELOC secured by your primary residence, if the funds are used to purchase or improve a rental property, generally has its interest treated as a rental expense, not a personal mortgage interest deduction.

    This matters because personal mortgage interest deductions face limitations that don't apply the same way to rental property interest. Correctly traced, a HELOC used for a rental can produce a fully deductible expense against rental income, even though the loan itself sits against your home.

    The tracing only holds up if you can actually show where the money went — a clear paper trail from the HELOC draw to the rental purchase or improvement, ideally with minimal commingling with other funds along the way. A HELOC used for a mix of purposes (part rental down payment, part kitchen remodel at home, part a vacation) needs to be split proportionally, which gets considerably harder to substantiate after the fact.

    If you're planning to use a HELOC this way, it's worth setting up the draw and the payment cleanly from the start — a dedicated draw for the rental purpose, documented at the time — rather than trying to reconstruct the trace a year later at tax time.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
21. Dec 11, 2025Planning

    Converting a Primary Residence Into a Rental: Basis and Timing

    The day you start renting out your former home, the tax rules quietly shift underneath it — starting with what its "basis" even is.

    When a home you've lived in becomes a rental, its depreciable basis is generally the lesser of its original cost basis (adjusted for any improvements) or its fair market value on the date it was converted — not necessarily what you originally paid. If the property has appreciated since purchase, this "lower of" rule matters quite a bit for how much depreciation you can actually claim.

    The clock on the primary-residence sale exclusion doesn't stop the moment you convert — it's based on your ownership and use history, so a sale down the road may still qualify for some or all of that exclusion, depending on how long you lived there before converting and how long it's been a rental since.

    Getting an appraisal or clear valuation at the time of conversion is worth doing even though it's not always legally required — it's the reference point that determines your depreciation basis going forward, and reconstructing "what the home was worth three years ago" after the fact is much harder than documenting it at the time.

    This conversion is exactly the kind of one-time event worth flagging to us when it happens, rather than mentioning it for the first time when the return is being prepared — the basis question is much easier to resolve with contemporaneous records.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
22. Nov 27, 2025Deadlines

    Multi-State Landlords: When You Owe a Return Somewhere Else

    Own a rental in a state you don't live in, and you likely owe that state a tax return too — even if you've never set foot there this year.

    Rental income is generally taxed by the state where the property is located, regardless of where you live. That typically means filing a nonresident state return in the property's state, in addition to your resident state return where you report the same income.

    Most resident states provide a credit for taxes paid to another state on the same income, which prevents the income from being fully taxed twice — but the credit calculation isn't always dollar-for-dollar, and the two returns need to be prepared together, not independently, to get the credit right.

    Filing thresholds and requirements vary meaningfully by state — some require a return even at a small net loss, others have minimum income thresholds before a nonresident filing is required at all. This is very much a state-by-state question, not a single universal rule.

    Owning rentals across several states multiplies this complexity proportionally, and it's easy for an out-of-state filing obligation to get missed entirely in the first year of ownership, before a pattern of reminders exists. Tell us as soon as you close on an out-of-state property, so the filing gets set up correctly from year one.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
23. Nov 13, 2025Planning

    Casualty Losses: What a Storm or Fire Actually Means at Tax Time

    A storm or fire that damages your rental affects your taxes on a timeline that doesn't wait for the repair to actually happen.

    A casualty loss — sudden damage from a storm, fire, or similar event — can potentially be deducted, but the calculation is based on the decline in the property's fair market value or its adjusted basis, whichever is smaller, reduced by any insurance reimbursement you receive or expect to receive.

    Insurance reimbursement matters even before it arrives: if you expect to be reimbursed, that expected amount factors into the loss calculation for the year of the casualty, which can complicate a return filed before a claim is fully settled.

    If a reimbursement ends up exceeding your adjusted basis in the property, that excess can actually create a taxable gain, not a loss — a counterintuitive outcome that catches people off guard after a total loss on an older, largely-depreciated property.

    Repairs made after a casualty are generally treated as restoring the property, and are typically depreciated rather than deducted immediately, similar to other capital improvements. Keep documentation of the damage, the insurance claim, and the repair costs together — this is one of the more document-heavy situations at tax time, and it's much easier to compile in real time than reconstruct later.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
24. Oct 30, 2025Ownership

    Gifting Real Estate to Family: What the IRS Actually Cares About

    Handing property to a family member sounds simple, but the IRS tracks the value, the basis, and sometimes a filing you didn't know existed.

    Gifting real estate can trigger a federal gift tax filing requirement if the property's value exceeds the annual exclusion amount, even though most people won't actually owe gift tax thanks to a much larger lifetime exemption. The filing requirement and the actual tax owed are two separate questions — you can owe a filing without owing any tax.

    Unlike inherited property, gifted property generally carries over the giver's original cost basis to the recipient, rather than stepping up to current market value. That means the recipient inherits the built-in gain too, which can be a significant difference from what a future inheritance would have looked like.

    If the property has a mortgage still attached, the math gets more complex — the transfer can be treated partly as a gift and partly as a sale, depending on how the debt is handled, which can trigger gain recognition for the giver in a way a debt-free gift wouldn't.

    Gifting is often compared to simply waiting and letting the property pass through an estate instead, and the basis difference alone is usually significant enough to make that comparison worth having with us before a transfer, not after the deed is already recorded.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
25. Oct 16, 2025Planning

    Stepped-Up Basis: Why Inherited Property Isn't Taxed Like You'd Expect

    Property you inherit generally gets a fresh tax basis at its value on the date of death — which can erase years of built-in gain overnight.

    When you inherit real estate, its basis for tax purposes generally "steps up" (or occasionally down) to the property's fair market value on the date of the original owner's death, rather than carrying over whatever they originally paid for it.

    This matters enormously if you decide to sell shortly after inheriting: because the basis reset to a recent market value, there's often little to no taxable gain on a sale soon after inheritance, even if the original owner held the property for decades and it appreciated substantially during that time.

    If you decide to keep and rent the property instead of selling, that stepped-up value also becomes your new depreciable basis going forward — effectively giving you a fresh, larger depreciation schedule on a property that may have already been substantially or fully depreciated by whoever you inherited it from.

    Getting the valuation date and figure right matters, and it's worth having a formal appraisal near the date of death rather than estimating later, especially if there's any chance the property will be sold or a return will be examined. This is one of the more valuable and most overlooked provisions in estate-related property transfers.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
26. Oct 2, 2025Ownership

    Real Estate Crowdfunding: What the Tax Paperwork Actually Looks Like

    Investing through a crowdfunding platform still generates real tax paperwork — and which form you get says a lot about what you actually own.

    Real estate crowdfunding platforms structure deals in different ways, and the tax document you receive depends entirely on that structure. Debt-based investments (you're effectively a lender) typically generate a 1099-INT or 1099-OID reporting interest income. Equity investments structured as a partnership typically generate a K-1 instead, similar to a syndication.

    The distinction matters beyond paperwork timing: interest income is taxed as ordinary income with no special treatment, while a K-1 from an equity investment may carry depreciation and other pass-through items that can meaningfully change your actual tax liability compared to the cash you received.

    Some platforms pool many small investments into funds that themselves invest across several properties — in those cases, you may receive a single K-1 that already nets together income and losses from multiple underlying properties, without full visibility into each one individually.

    Because the tax character varies so much by platform and deal structure, it's worth sending us the offering documents when you're evaluating one of these investments, not just the return-on-investment projections — the tax treatment materially affects what that projected return actually nets you.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
27. Sep 18, 2025Exchanges

    Land Contracts and Rent-to-Own: How the IRS Sees the Sale

    A rent-to-own or land contract arrangement can be taxed as a sale from day one — even though no deed changes hands for years.

    In a land contract (sometimes called a contract for deed) or certain rent-to-own arrangements, the IRS may treat the transaction as a completed sale for tax purposes as soon as the agreement is signed, based on who holds the economic benefits and risks of ownership — not necessarily whenever the deed is legally recorded.

    If it's treated as a sale, the seller generally recognizes gain (often under installment sale rules, spread across the payments received) starting immediately, rather than waiting until the final payment and deed transfer. This surprises sellers who assumed the tax event happens only when the paperwork formally closes.

    A genuine month-to-month rental with an option to purchase later is treated differently than an agreement that functions economically like ownership from the start — factors like who pays property taxes and insurance, and how much of the payment is credited toward the eventual purchase price, all weigh into how it's classified.

    Structuring one of these deals is worth doing with tax treatment in mind from the beginning, since the classification is based on substance over form — how the agreement actually plays out — not just what the paperwork calls it.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
28. Sep 4, 2025Planning

    Property Tax Appeals: The Timing Question Nobody Asks

    Winning a property tax appeal is good news for your bill — but the timing of when it's resolved can shift which tax year benefits.

    If you successfully appeal a property's assessed value and your property taxes are reduced, the timing of that reduction — and whether it's applied retroactively or only going forward — determines which tax year sees the benefit on your return.

    A retroactive refund of property taxes you previously deducted can, in some cases, need to be reported as income in the year you receive it, rather than simply reducing a deduction you already claimed in a prior year. This is easy to overlook since it feels like "getting money back," not like new income.

    If an appeal is still pending at year-end, it's generally fine to deduct the property tax as billed and adjust later if the appeal succeeds — you don't need to wait for the outcome to file your return on time.

    Property tax appeals often take many months to resolve, sometimes crossing into a different tax year than the one the assessment applied to. Keep the appeal paperwork and any refund notice together; this is one of those situations where the actual cash-in-hand and the correct tax-year treatment don't automatically line up.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
29. Aug 21, 2025Deductions

    Section 179 vs. Bonus Depreciation for Real Estate-Related Equipment

    Two different accelerated depreciation rules apply to equipment used in a rental business — and they don't always work the same way or apply to the same things.

    Section 179 and bonus depreciation both let you deduct the cost of certain property faster than standard depreciation schedules, but they apply somewhat differently. Section 179 generally has an annual dollar cap and phases out once total qualifying purchases exceed a threshold; it also can't create or increase a loss from the rental activity itself in some circumstances.

    Bonus depreciation doesn't share that same loss limitation and has historically applied more broadly, though the percentage of cost eligible for bonus treatment has changed across different tax years — this is an area where checking the current-year rules specifically matters more than most.

    Importantly, the building itself generally doesn't qualify for either of these accelerated methods — they apply to shorter-lived personal property within a rental (appliances, certain flooring, equipment used in the rental business), which is exactly the kind of component a cost segregation study is designed to identify separately from the building.

    Because the rules and percentages shift from year to year, and because misapplying them to ineligible property is a common error, this is worth confirming with us at the time of a large equipment or component purchase rather than assuming last year's treatment still applies.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.
30. Aug 7, 2025Ownership

    Trusts and Rental Property: Who Actually Reports the Income

    Putting a rental into a trust changes who's legally holding it — but whether it changes who reports the income depends entirely on what kind of trust it is.

    A revocable living trust — the common estate-planning tool used to avoid probate — is generally disregarded for income tax purposes while the person who created it is alive. Rental income from a property held in this kind of trust is typically still reported on that person's own return, exactly as if the trust didn't exist for tax purposes.

    An irrevocable trust is a different story: depending on its terms, the trust itself may need to file its own tax return and report the rental income, potentially at compressed trust tax brackets that reach the top rate much faster than an individual's brackets do.

    Distributions from an irrevocable trust to beneficiaries can shift some of that income (and its tax liability) to the beneficiary instead of the trust, depending on how the trust is structured and how much is actually distributed each year — this is an area where the trust document itself dictates the tax outcome as much as the tax code does.

    Moving a rental property into any trust is a decision worth coordinating between your estate attorney and us before it happens, since the tax reporting obligation can change the moment the transfer is complete, regardless of when anyone gets around to updating who is preparing which return.

    Have a question about how this applies to your situation? Reach out — we're happy to talk it through.