Friday Weekly Q&A Call - 11/06/26 · 🏠 Lower Taxes w/ Ryan

Friday Weekly Q&A Call - 11/06/26

Key Takeaways: Tax Strategy 365 Q&A

Year-End Planning

Maximize your existing STR

Improvements and furnishings not captured last year go on this year’s return. They can be added to the depreciation schedule and accelerated.
Track mileage to and from the property, and keep a log in case of an audit.

Vehicle purchase (Section 179 / bonus depreciation)

If the vehicle is used more than 50% for business or rental activity, the purchase can be written off whether financed or paid in cash.
Vehicles over 6,000 lbs (SUVs, trucks) have no cap on the accelerated deduction when used 100% for business.
Lighter vehicles (sedans) face a cap of about $21,000 this year.

Hire your kids

Kids aged 9-10 and up can do real work (yard work, assembling furniture, errands, data entry) and be paid through a real payroll provider (Gusto or QuickBooks) from the rental account.
Run payroll before year-end and have the W-2 ready by January 31.
The earned income lets you open a child Roth IRA (up to $7,500, matched to income earned). The money can also cover sports, clothes, or tuition.

Augusta Rule (IRC §280A(g))

It’s not too late. Create a meeting agenda, invoice or transfer from the business to your personal account, and keep rentals to 14 days or fewer.
Do it through an LLC taxed as an S corporation, which pays the primary residence.

Prepay what you can

Property taxes (some counties offer a ~4% discount for early payment), contractors, and other expenses in a high-income year.

Backdoor Roth

It gives no deduction, but it moves money into tax-free growth.
Convert right after contributing so it doesn’t grow in between.
Watch the pro-rata rule: existing traditional IRA balances make the conversion partially taxable. Consider rolling those into a 401(k) first.
Work with your advisor.

Tax-loss harvesting

Sell losers to offset gains. Net losses beyond gains offset up to $3,000 of ordinary income, with the rest carried forward.
With the recent volatility, it’s a good time to review your brokerage account.

Oil and gas investments

They can offer a roughly 80-90% non-passive write-off against W-2 or business income, but they are high-risk.
Example: a $100K investment gives an $80K deduction, about $30K in tax savings at the 37% bracket, but you still put up $100K to get it.
Don’t let the tax tail wag the dog.

Real Estate Insights

Long-term rentals generate passive losses, so they often give no deduction unless you hold real estate professional status. Selling or doing a 1031 exchange may be better than holding.
Buying in this market: You make your money at purchase. Look for the “ugly house on the block” where you can add value immediately. Builders are offering rate buydowns on new construction.
A 2026 purchase of a non-passive rental like an STR can still be closed and placed in service for acceleration if you move quickly.
DSCR loans qualify you based on rental income, not personal income. Several members said rates are now competitive with or better than conventional ones. Lenders mentioned: Movement Mortgage and Visio Lending (via The Mortgage Shop).
Banking for LLCs: Chase was easy to set up for multiple LLCs, and veterans may pay no fees. Wells Fargo often requires high minimum balances.

Cost Segregation

Get two quotes (for example RE Cost Seg and CSSI). The software differs, so results differ. Pick the better proposal.
A rapid report is generally used for properties around $500K and below, and an engineered report for $1M and above.
Condos have little or no land value, which means more depreciable building basis. Make sure the engineer treats it as a condo, not a townhome. One member had to have a report corrected.

Material Participation

You must meet the hour requirement every year you want losses to offset W-2 income (typically 100+ hours and more than anyone else).
Keep a time log, and track revenue and expenses with a solid system (REI Hub, Baselane, QuickBooks, or Excel).

Legislative Outlook

100% bonus depreciation is now permanent, with no sunset. It applies to qualifying property, vehicles, and equipment.
Tax law changes are expected to be unlikely in the near term due to a divided Congress.

Entity Structure and Money Flow

Members were unclear on how money should flow between LLCs, a holding company, a management company, and a living trust. STR Law Guys advises not letting funds sit in the holding company and moving them on to the trust.
This needs one-on-one review. The asset protection class next Friday will cover it, and members suggested bringing in an asset protection attorney.

General Mindset

Buy for the business case, not the deduction. Tax savings come from spending money, so the investment has to make sense on its own.
The best time to buy is when others aren’t. Incentives like rate buydowns create opportunities in soft markets.
Documentation wins. Time logs, mileage logs, invoices, agendas, and clean books are what make deductions hold up.
Plan before December 31. Payroll, purchases, and prepayments need to happen within the tax year.
Compare before committing. Get multiple quotes, lenders, and opinions.
Stay calm in volatility. Use it to harvest losses and clean up your portfolio, not to panic.
Get professional guidance. Entity flows, pro-rata, and Roth conversions depend on your situation, so verify with your CPA or advisor. This session is educational and not personalized tax advice.

Thank you all for joining!

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Friday Weekly Q&A Call - 11/06/26

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