Learn about Real Estate & Asset Protection at our next ALL DAY FREE LIVESTREAM 9 AM to 4 PM PT. Our attorneys and specialists answer ALL questions you bring to us at this event we have two times a month. Save Your Seat: aba.link/3j2
I found your video today while attempting to learn more about STRs. I saw how long it was and paused...questioning do I really want to watch this. I did and all have want to say is great job! This was time well spend and I learned a lot. You answered some of my questions and enabled me to write of list of question I need to get answered. Thank you for your time. You stand out in a world (TH-cam) that is flooded with mediocre content.
Great question, in order to assist you further, I highly recommend you request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. aba.link/tobyss
Isn’t it a big red flag 🚩to the IRS, if I close the property in December, manage it myself, get the big write off, and hire a management and cleaning company in January, won’t they audit me for this? And if they find out I did this, won’t they remove the benefits? Thanks.
No. It is black letter law in both the code and the regs. We have tens of thousands of clients across the US, handle 10,000+ tax returns per year and see very few audits for exactly this reason. The IRS wants to see a STR taxed as a trade or business - which is exactly what we are doing. Businesses get to use bonus depreciation (there is a flip side to this - recapture is ordinary income, but only on the value of the 5, 7, and 15 year assets). The stuff that gets people audited is treating STRs as long term rentals and/or trying to group them with passive investment properties. The IRS loves to hammer those because you are supposed to be treating STRs as trades or businesses.
That's a good question. I highly recommend you join us at the Tax Tuesday. You can have your tax questions answered live by our experts live during the Q&A. Sign up here: 👉 aba.link/tobytaxtues
Toby... I'm considering STR for a 7 bedroom mansion near a ski resort in California. It is a large resort-like property, unsurrounded by other properties. My primary home is approx. 1hr. away. I plan to materially participate in the STR. Sometimes the roads are closed after it snows, and there's no access to the property for a day or two, until the roads are snowplowed. In order to make certain that I have access to the property at all times, and also to avoid the icy and hazardous conditions of driving up and down the mountain on a frequent basis, I'm considering staying in one of the rooms, and STR the other rooms, or staying in an RV on the property, and STR the entire mansion. How would me staying in one of the rooms, or in an RV on the property, to manage operations, cleaning, holiday decorating, event planning, wedding parties, pool parties, etc. affect me tax-wise? Does it make a difference whether or not I stay in/on the property? Does it affect my taxes negatively?
Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby
Hello! In your opinion, for my Air B&B of my monthly profit after my monthly needs/expenses what is the percentage I should be putting aside for the end of year business taxes?? Please advise!
If you signed up with Anderson Business Advisors, you can reach out to your Client Success Coordinator. You can also call 800-706-4741 or join us for an on-line event.
Great video! The question I have is if the short term rental rented on average under seven days or less, would it automatically qualify as business property/investment that is depreciable for 39.5 years and able to be put on a schedule C? I always thought that it would be on a schedule E and depreciated for 27.5 years. Thank you!
Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby
The tests to determine if it's 27.5 years vs. 39 years is whether the average stay is 30 days or less (which makes it non-residential 39 year depreciable property). It's not the 7 day test either, that's used for different tests but not this one. The test to determine whether it goes on Schedule C or E is a completely different test, that is dependent on whether or not you offer "substantial services", which means hotel-like services such as cleanings or providing food or entertainment during a guest's stay.
Learn about Real Estate & Asset Protection at our next ALL DAY FREE LIVESTREAM 9 AM to 4 PM PT. Our attorneys and specialists answer ALL questions you bring to us at this event we have two times a month. Save Your Seat: aba.link/3j2
I found your video today while attempting to learn more about STRs. I saw how long it was and paused...questioning do I really want to watch this. I did and all have want to say is great job! This was time well spend and I learned a lot. You answered some of my questions and enabled me to write of list of question I need to get answered. Thank you for your time. You stand out in a world (TH-cam) that is flooded with mediocre content.
Can I turn my Primary Residence of 1 Room as Short-term Rental to reduce Taxes on High W2 Income ???
Great question, in order to assist you further, I highly recommend you request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. aba.link/tobyss
Isn’t it a big red flag 🚩to the IRS, if I close the property in December, manage it myself, get the big write off, and hire a management and cleaning company in January, won’t they audit me for this? And if they find out I did this, won’t they remove the benefits? Thanks.
No. It is black letter law in both the code and the regs. We have tens of thousands of clients across the US, handle 10,000+ tax returns per year and see very few audits for exactly this reason. The IRS wants to see a STR taxed as a trade or business - which is exactly what we are doing. Businesses get to use bonus depreciation (there is a flip side to this - recapture is ordinary income, but only on the value of the 5, 7, and 15 year assets). The stuff that gets people audited is treating STRs as long term rentals and/or trying to group them with passive investment properties. The IRS loves to hammer those because you are supposed to be treating STRs as trades or businesses.
Incredibly well explained. Thank you, Toby!!!
Kirkland, Washington!
Las Vegas Nevada
Sevierville TN
You mentioned less than 7 days, and less than 3 day rent. What about greater than 7 days?
Nashville tn
If the property is a triplex, and I get 17 nights rented in total. Does it qualify? Although calendar nights might be only 10 or so.
That's a good question. I highly recommend you join us at the Tax Tuesday. You can have your tax questions answered live by our experts live during the Q&A. Sign up here: 👉 aba.link/tobytaxtues
Toby...
I'm considering STR for a 7 bedroom mansion near a ski resort in California.
It is a large resort-like property, unsurrounded by other properties.
My primary home is approx. 1hr. away.
I plan to materially participate in the STR.
Sometimes the roads are closed after it snows, and there's no access to the property for a day or two, until the roads are snowplowed.
In order to make certain that I have access to the property at all times, and also to avoid the icy and hazardous conditions of driving up and down the mountain on a frequent basis, I'm considering staying in one of the rooms, and STR the other rooms, or staying in an RV on the property, and STR the entire mansion. How would me staying in one of the rooms, or in an RV on the property, to manage operations, cleaning, holiday decorating, event planning, wedding parties, pool parties, etc. affect me tax-wise?
Does it make a difference whether or not I stay in/on the property?
Does it affect my taxes negatively?
Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby
Los angeles
Even if it is C corp, u can make an S election !
Hello! In your opinion, for my Air B&B of my monthly profit after my monthly needs/expenses what is the percentage I should be putting aside for the end of year business taxes?? Please advise!
Camden tn
What is AMT and the AMT threshold?
Hi, is that true for Airbnb run from my primary residence? I have a converted shed that I use as Airbnb. Will this apply in that case as well?
How do i become a client.. i signed up with Anderson business but need a cpa i have 2 rentals
Thank you
If you signed up with Anderson Business Advisors, you can reach out to your Client Success Coordinator.
You can also call 800-706-4741 or join us for an on-line event.
Hey Toby, can you help me with my trust please? I'm in AU
Unfortunately, we only conduct services in the United States of America.
Great video! The question I have is if the short term rental rented on average under seven days or less, would it automatically qualify as business property/investment that is depreciable for 39.5 years and able to be put on a schedule C? I always thought that it would be on a schedule E and depreciated for 27.5 years. Thank you!
Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby
The tests to determine if it's 27.5 years vs. 39 years is whether the average stay is 30 days or less (which makes it non-residential 39 year depreciable property). It's not the 7 day test either, that's used for different tests but not this one. The test to determine whether it goes on Schedule C or E is a completely different test, that is dependent on whether or not you offer "substantial services", which means hotel-like services such as cleanings or providing food or entertainment during a guest's stay.
Fadett al
Tallahassee fl