2 questions: 1)What if you buy a property late in the year, meet one of the tests, but it wasn't ready to rent by year-end, so no income - could the losses still offset active income? 2) If there are structural changes that need to be contracted out, besides basic repairs, would this services count against you in considering the "100+ more than anyone else" rule? Thanks, this series has been super helpful!!
1) You Need to have guest stays otherwise you can't determine the average period of customer use and therefore can't use this strategy. This is confirmed in a tax court case. 2) Yes, it generally counts against you.
Hey awesome channel awesome video! Question, what if i've already been renting my property for 1 year long term rental and i want to transition to STR and use this strategy but i've already depreciated the home the first year over 27.5 years. Could i switch over to this strategy still?
Thank you for the video i do have a question should the 8582 be in every file? so if 1 property has a loss and then the other had a gain and the overall was a gain of only a few hundred dollars would we still have 8582? Thank you
Is Material participation rule applicable PER property? For example, if you own 4 Short Term Rentals, do you need to show material participation in each property? Or it is OK as long as you have a total of 100 hours material participation (and more than any one else) on ALL 4 properties? Would love to hear your thoughts on it.
Great Video! In your example of materially participating 50 hours/year self managing a STR and a cleaner spent 40 hours. What if you hired different 20 cleaners @ 2 hours per clean. Would that exclude you from the 100 hour minimum? Also what if you acquired a new STR in December and couldn't meet the 100 hour minimum before EOY, what happens?
I am confused about the tax impact if you exceed the 10%/15 day rule. I was thinking of buying an STR but wanted to use it for 60 days. Do I lose the depreciation on the property? Or does the depreciation/expenses get suspended to offset income on the property? If I rent it out say 180 days, do I get to 180/240 split?
Hi does the short term rental loophole applicable to commercial space? If I lease out commercial space for events less than 7 days, would these rules apply? Thanks for the informative videos
Thank you for the super well and detailed explanation! Question: Assume I meet material particiation on a short term rental, and have 4K depreciation loss on the STR. At the same time I have a long term rental that has 8K depreciation loss. How much total loss can I deduct from W2, 4K or 12K?
Hi Brandon and Thomas- this is helpful going over the details. Do I need to keep a log throughout the year on my material participation if I know that I solely manage and spend a lot more hours than cleaning crew? Are the hours reported to my CPA or just a yes or question on whether or not I qualify?
Yes you definitely need to record the hours with a time log each year. CPAs can "take your word for it" but you will need a time log if you were ever audited.
2 questions: 1)What if you buy a property late in the year, meet one of the tests, but it wasn't ready to rent by year-end, so no income - could the losses still offset active income? 2) If there are structural changes that need to be contracted out, besides basic repairs, would this services count against you in considering the "100+ more than anyone else" rule? Thanks, this series has been super helpful!!
1) You Need to have guest stays otherwise you can't determine the average period of customer use and therefore can't use this strategy. This is confirmed in a tax court case.
2) Yes, it generally counts against you.
This is super informative, well structured, and clearly explained. Thank you for creating and publishing these series.
Can you make your Primary Residence House's 1 or 2 Rooms (half portion) as STRs to write off High W2 Income ???
wow, you guys should be teachers in schools and colleges, i was Anderson fan but OMG you converted me. great information and even better delivery.
897$? If I spend 20 hours a week on TH-cam watching real estate tax videos does that mean I'm a real estate professional 😎
Hey awesome channel awesome video! Question, what if i've already been renting my property for 1 year long term rental and i want to transition to STR and use this strategy but i've already depreciated the home the first year over 27.5 years. Could i switch over to this strategy still?
Any update on this?
Thank you for the video i do have a question should the 8582 be in every file? so if 1 property has a loss and then the other had a gain and the overall was a gain of only a few hundred dollars would we still have 8582? Thank you
Great info!! Are there any call outs for STR multi-family residential properties (i.e. duplex ) when you live in one of the units? Thank you!!
I am in this situation as well so would love to understand the right answer
Is Material participation rule applicable PER property? For example, if you own 4 Short Term Rentals, do you need to show material participation in each property? Or it is OK as long as you have a total of 100 hours material participation (and more than any one else) on ALL 4 properties? Would love to hear your thoughts on it.
Per property!
so if you use a property manager can you still take advantage of the STR loophole?
It's theoretically possible but challenging and risky in reality.
6:30 if it is a quad and 2 are long term and 2 are short that's 50/50 then what do we do in this instance because it isn't over 50%?
Great Video! In your example of materially participating 50 hours/year self managing a STR and a cleaner spent 40 hours. What if you hired different 20 cleaners @ 2 hours per clean. Would that exclude you from the 100 hour minimum? Also what if you acquired a new STR in December and couldn't meet the 100 hour minimum before EOY, what happens?
good question. Also curious to know
On personal use, what if your other, unrelated, business rents the unit out for a conference?
I am confused about the tax impact if you exceed the 10%/15 day rule. I was thinking of buying an STR but wanted to use it for 60 days. Do I lose the depreciation on the property? Or does the depreciation/expenses get suspended to offset income on the property? If I rent it out say 180 days, do I get to 180/240 split?
Hi does the short term rental loophole applicable to commercial space? If I lease out commercial space for events less than 7 days, would these rules apply? Thanks for the informative videos
Thank you for the super well and detailed explanation! Question: Assume I meet material particiation on a short term rental, and have 4K depreciation loss on the STR. At the same time I have a long term rental that has 8K depreciation loss. How much total loss can I deduct from W2, 4K or 12K?
Just the $4k of loss on the STR. The LTR is still passive income that can't offset your W-2 income.
@@tax-modernThank you!
Hi Brandon and Thomas- this is helpful going over the details. Do I need to keep a log throughout the year on my material participation if I know that I solely manage and spend a lot more hours than cleaning crew? Are the hours reported to my CPA or just a yes or question on whether or not I qualify?
Yes you definitely need to record the hours with a time log each year. CPAs can "take your word for it" but you will need a time log if you were ever audited.
Can someone add the irs link to that reg?
Give us the IRS links, thanks!
Following
great video