Rental Real Estate Tax & Advisory Services

Rental real estate comes with a variety of tax considerations, from depreciation and deductions to passive activity rules. We provide proactive tax planning to ensure you’re taking advantage of all available tax-saving opportunities while remaining compliant with federal, state, and local tax laws.

• Maximizing rental property deductions (interest, repairs, etc.)
• Depreciation strategies for real estate
• Passive loss limitations and exceptions
• Tax implications of short-term rentals (Airbnb, VRBO, etc.)

Rental property income must be reported accurately to avoid penalties and ensure compliance. We handle the preparation and filing of your real estate tax returns, ensuring that all eligible deductions are claimed and that your returns are filed correctly.

• Schedule E (rental property income) preparation
• Federal and state tax filings
• Real estate tax credits and incentives
• Reporting of rental income and expenses

If you’re selling a rental property and planning to reinvest in another, a 1031 exchange can help you defer capital gains taxes. We guide you through the 1031 exchange process to ensure compliance with IRS rules and to maximize the tax deferral benefits.

• 1031 exchange consulting and planning
• Identification of like-kind properties
• Compliance with IRS deadlines and requirements
• Deferring capital gains taxes through reinvestment

The structure of your rental property ownership can have a significant impact on your tax liabilities and legal protections. We provide expert advice on entity selection and structuring, whether it’s more beneficial for you to hold properties as an individual, in an LLC, or through other entities.

• LLCs, partnerships, and S-corp structuring for rental properties
• Legal liability protection and tax benefits
• Entity formation and registration
• Real estate business setup and tax implications

Your short-term rental must have an average guest stay of 7 days or less, AND you must materially participate in the rental activity.

• This makes the rental non-passive, even if you’re not a real estate professional under §469(c)(7).
• If the average stay is over 7 days but under 30, additional rules apply (see exceptions), but < 7 days is the cleanest route.

You must meet one of the IRS’s material participation tests, such as:

• 500+ hours of activity in the rental during the year (most common)
• Doing substantially all the work yourself
• 100+ hours and no one else does more than you

Activities that count: communicating with guests, cleaning, repairs, marketing, managing listings, and more.

Typically, rental real estate is passive, and losses can’t offset non-passive income (like W-2 or business income) unless you qualify as a real estate professional. But this rule lets non-REPs take losses as active, due to the unique treatment of certain STRs.

• Deduct depreciation, repairs, mortgage interest, and other expenses.
• Offset high-income W-2 earnings (great for high-income professionals).
• No need to qualify as a real estate professional (REPS rules are strict).

• Proper recordkeeping is critical (track hours!).
• Cleaning services and property managers can disqualify you if they perform more hours than you.
• STRs in HOA-restricted or highly regulated areas can increase scrutiny.
• Depreciation recapture and Section 199A QBI implications should be evaluated carefully.