Ryan Bakke, CPA

Are there any other tax strategies we can consider: 1031 exchange done in 2025 and reported on form 8824. STR PIS in 2026. After deducting the 1031 exchange funds and land value from the purchase price, I'm being told by a cost seg company at a consultation that we will only have about $95,000 +/- to work with for bonus depreciation which he estimated that at our tax bracket would only end up being $7K - 8K, but the Cost Seg would be $3K. So after that cost we would only be looking at around $3K - $4K which may not be worth the effort. Looks like we just have to do regular 37 yr depreciation unless there is another angle we can take advantage of. Any ideas?

New comment 7h ago

Ryan Bakke, CPA

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0 likes • 2d

that is the one downside to a 1031 exchange is that your basis in the new property for depreciation purposes is the old basis of the sold property. So if you held onto the property for a long time and go to 1031x it, your basis isn't that high unless you take on an additional loan amount. Do you have the basis calculator that they provided to you? Im sure they're right but worth looking into. If your basis is only going to be $95k, don't do cost-seg it's not worth it.

Ainsley Moyer

14d •

☀️ Chat

PAD/Cost Seg

Does a PAD and Cost Seg have to be complete in the same year? or can I close, place into service in mid December 2026 and have a few stays. Then take the property out of service, do renovations and place back into service and claim both the pad and the cost seg in 2027?

New comment 2d ago

Ryan Bakke, CPA

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1 like • 14d

They have to be in 2 different calendar years. So if you PIS in 2026 and do renovations in 2026- no PAD. If you PIS in 2026 and do Reno in 2027 than it’s a pad on 2027 return.

Ryan Bakke, CPA

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0 likes • 3d

@Ainsley Moyer I believe since you took it out of service for some time for the renovations, it still qualifies. Otherwise, it has to skip calendar years

Lourdie Castillo

9d •

☀️ Chat

LLC partnership tax mplications

@Ryan Bakke, CPA We just closed STR property in Florida as second home loan titled under my name , but we created and filed LLC as partnership with me and my wife. Did we do the right thing? or are we going to be paying more on taxes due to partnership rather than single entity? What are the tax impilcations?

New comment 4d ago

Ryan Bakke, CPA

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0 likes • 5d

@Lourdie Castillo yes

Ryan Bakke, CPA

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0 likes • 5d

@Lourdie Castillo material participation doesn’t change regardless of who owns the property.