How to Structure Seller Financing (Get a 5% Interest Rate!) (Rookie Reply)
Summary
This article discusses the "one big beautiful bill" and its tax implications for real estate investors, particularly rookie investors. Hosts can now potentially benefit from increased depreciation deductions, especially those using house hacking. Additionally, the QBI deduction has been extended which can significantly reduce taxes for those with active businesses or profitable rental portfolios.
Key Insights
- •The "one big beautiful bill" allows for a significant increase in bonus depreciation, potentially writing off more than double the prior amount. For instance, a property might allow for $30,000 of depreciation instead of $15,000 in the first year.
- •The qualified business income (QBI) deduction allows individuals with active businesses to deduct 20% of their business income, which has been continued in this bill.
Action Items
- ✓Review your tax returns to see if you are taking advantage of the qualified business income (QBI) deduction. It is on the first page of the 1040 form.Effort: lowImpact: medium
Tools & Resources
- →Cost segregation firm: Hire a firm that does cost segregation, and so you provide them with your property information to break out the building into different components like specialty plumbing, specialty electricals, and with those numbers, then your CPA could follow your tax return using faster depreciation because the IRS has a set of law that says certain things, we can write them off or depreciate faster than other items.
Watch Out For
- ⚠The article suggests that many people are missing the QBI deduction. It is important to review tax returns with your CPA.
Related News
Federal judge sides with homeowners against Clark County in ongoing short-term rental battle - ktnv.com
A federal judge sided with homeowners in their ongoing legal battle against Clark County regarding short-term rentals. This suggests potential legal challenges to local STR regulations, impacting hosts' ability to operate. Hosts in Clark County should stay informed about the legal proceedings and potential impacts on their permits.
America’s Most Famous Island Cracks Down on Short-Term Rentals, Slashing Thousands of Vacation Homes - Realtor.com
A famous island in the US is cracking down on short-term rentals, potentially slashing thousands of vacation homes. This could significantly impact hosts operating in the area. Hosts should monitor local regulations and consider the potential for reduced rental opportunities.
Central Okanagan Regional District to review short term rental rules in rural areas - West K News
The Central Okanagan Regional District is reviewing short-term rental rules in rural areas. Hosts in this area should be aware of potential changes to regulations. Stay informed and monitor for updates to ensure compliance.
New Research: The Rising Price of Hotel Tax Compliance
A new report highlights the increasing complexity and cost of tax compliance in the lodging industry, including short-term rentals. Hosts are spending significant time on compliance, and many lack confidence in their methods. Consider exploring AI-powered tools to streamline tax processes and free up time for guest experience and growth.