Friday Weekly Q&A Call - 08/14/2026 · 🏠 Lower Taxes w/ Ryan

Lyn Cueto

Aug 17 • 📸 Recorded Calls

Friday Weekly Q&A Call - 08/14/2026

Link: https://www.skool.com/taxes/classroom/ec6893ee?md=b6c258bc4cba4430ac3565d6170fcac0

Here's a summary of the key takeaways from this Friday Q&A session:

LLC Transfers & Financing

DSCR/HELOC on properties in LLCs: You'll generally get better rates and more lender options doing a cash-out refi or HELOC in your personal name before transferring the property into an LLC, rather than after.
Quitclaiming into an LLC provides liability protection (limits exposure to the LLC's assets) but the transfer process (title work, possible refiling of permits/licenses, transfer taxes) varies significantly by state/county — worth a dedicated conversation with your attorney/structuring team.
Several attendees are using STR Law Guys for LLC/holding company structuring; process typically takes 6–8 weeks, so starting early (even if filing at year-start) is recommended, especially to avoid paying a full year's state franchise fee (e.g., CA's $800 minimum) for a partial year.

Cost Segregation Studies

A cost seg study breaks a property's purchase price into individual components (flooring, cabinets, fixtures, etc.), each with different depreciation schedules (5, 7, 15 vs. 27.5/39 years), enabling bonus depreciation on shorter-life items.
Can be based on original purchase price and/or post-renovation costs — if renovations are substantial (structural work like flooring, cabinets, plumbing), include them; minor items (furniture, hot tubs) can often just be added as separate line items without a new study.
A second cost seg is only needed if new construction/major additions (e.g., an ADU) create new depreciable components — not for cosmetic updates.
Vet providers carefully: cheap "DIY" cost seg spreadsheets (~$450) are increasingly risky since the IRS issued an audit technique guide flagging this area; mid-range providers (~$950+) with real engineering reports were recommended instead.
Before paying for a study, do the math: estimate eligible bonus depreciation × your actual marginal tax rate (not the 37% providers often assume for marketing) to see if the tax savings justify the cost.

Real Estate Professional Status (REPS) & Passive Losses

REPS requires 750+ hours in real estate AND more time in real estate than any other job.
Material participation is a separate, generally lower bar than REPS — mainly requires making management decisions (having a property manager doesn't disqualify you).
"Mom and pop" exception: if your modified AGI is under $100K (same threshold single or married filing jointly), you can deduct up to $25,000 in rental losses against ordinary income under active participation rules — without needing REPS. This phases out and disappears above certain income levels.

STR-to-LTR Conversion

If aiming for STR tax benefits, hold the property as a short-term rental for at least a full tax year (ideally two) before converting to long-term, to avoid raising audit flags.

Entity Structure Warnings

Never hold rental real estate in an S-Corp: no self-employment tax savings benefit (rental income isn't SE income), added cost of a separate corporate return (~$2,000+), payroll requirements, and moving property out later triggers a taxable "sale" to yourself.
Single-member LLCs are disregarded entities (no separate return); multi-member LLCs and S-Corps require separate filings.

Social Security & Retirement Planning

Passive rental income doesn't count toward Social Security earnings (no self-employment/W-2 tax paid on it), so missing years count as $0 in the 35-year averaging calculation.
One workaround: run a separate property management LLC (schedule C) to generate some earned income subject to SE tax — but this is generally more useful for funding retirement accounts (Solo 401k/SEP IRA) than for meaningfully boosting Social Security benefits.
Roth conversion ladders in low-income years (e.g., between jobs) were suggested as a way to reduce future Required Minimum Distributions — conversions aren't counted as SE or W-2 earnings, so they don't affect Social Security calculations either.

General Mindset

A theme running through nearly every question was that real estate tax and legal strategy is rarely one-size-fits-all — the "right" answer (refi vs. HELOC, cost seg or not, STR vs. LTR, entity structure) always came down to running the specific numbers for that person's situation rather than following a blanket rule. A few attitudes stood out as worth carrying forward:

Ask before you assume. Several costly mistakes (like holding rentals in an S-Corp) came from doing things solo before getting proper guidance — a 30-minute conversation with a specialist is cheap insurance against expensive errors.
Don't let overwhelm cause paralysis, but don't rush blindly either. Multiple people admitted to "dragging their feet" on LLC transfers or entity setup out of fear of the unknown — the advice was consistently to start the process early (interviewing providers, gathering paperwork) even if execution comes later.
Always tie a strategy back to the math. Whether it's a cost seg, a Roth conversion, or paying self-employment tax for Social Security credits, the group repeatedly ran actual dollar estimates (deduction × tax rate) rather than acting on a strategy's appeal alone.
Uncertainty is normal — lean on your team and keep learning. Several members noted this space is "scary" precisely because you don't know what you don't know, but treated that as a reason to stay engaged (asking questions, attending sessions) rather than a reason to disengage.

Thank you all for joining!

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Friday Weekly Q&A Call - 08/14/2026