Cost segregation, 1031 exchanges, bonus depreciation, and the rules that decide what a rental or a sale does to your return.
Rev. Proc. 2008-16 keeps the IRS from challenging a vacation home exchange if you owned the place 24 months, rented it at a fair rental for 14 days in each of the two years before closing, and held personal use to 10% of the rental days. On an $819,000 gain, missing it costs $199,372.
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You can buy the replacement property before you sell the old one, but only if an exchange accommodation titleholder takes title instead of you. Rev. Proc. 2000-37 gives you 5 business days for the paperwork, 45 days to name what you are selling, and 180 days to finish.
Read postA rental turns into a residence under IRC §280A(d)(1) the moment personal use passes the greater of 14 days or 10% of the days it was rented at a fair rental. On a beach house rented 200 days, the 25th night turns a $12,909 deductible loss into $0 and an $11,778 carryforward.
Read postA decade of Form 8582 carryforwards comes loose in a single year when you sell, but only if the sale clears three tests. Here is what §469(g) requires, the four transactions that quietly fail it, and what the freed losses are worth on a 2026 return.
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A job move can unlock a partial IRC §121 exclusion before you have owned and lived in the home for two years. The clean safe harbor requires the new workplace to be at least 50 miles farther from the home, then prorates up to $250,000 per spouse.
Read postThe rental property de minimis safe harbor lets most landlords deduct qualifying items costing $2,500 or less instead of depreciating them. The catch is a book policy and an annual return election, not Form 3115.
Read postNIIT on rental income disappears only when the activity is nonpassive and the rent comes from an actual trade or business. Real estate professional status clears the first gate, not both; the 500-hour safe harbor can clear the second.
Read postIRC §1402(a)(1) excludes rental income from self-employment tax no matter how short the stays, but hotel-style services put you on the wrong side of the line: about $5,652 of extra tax on $40,000 of 2026 profit. Where CCA 202151005 draws it.
Read postAn Airbnb with average guest stays under 30 days is nonresidential real property: 39-year depreciation, not 27.5. The 80% test that decides it, what misclassifying costs each year, and the Form 3115 fix if you have been doing it wrong.
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The §121 exclusion survives a home office inside the house. What you repay at sale is the depreciation claimed after May 6, 1997, taxed at no more than 25%, and for a typical office that is a four-figure bill, not five.
Read postA landlord pulls $180,000 out of a duplex and the lender calls the whole payment deductible. The tracing rules of Treas. Reg. §1.163-8T disagree. Where each dollar has to go, and the $5,400 mistake in one worked refi.
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A Lehi engineer buys a rental near campus and wonders if her longtime software still cuts it. The answer hangs on three numbers: household income, average guest stay, and the distance to a sale. Where the line sits, with the 2026 math.
Read postA landlord selling a duplex after ten years finds $120,000 of her gain taxed at a higher rate than the rest. What the 25% slice is, the four exits that actually cut it, and the two popular moves that fail.
Read postA landlord with $32,000 of Schedule E profit wants the 20% deduction her S corp friends get. The IRS answer is a safe harbor with a 250-hour price tag and a logging habit most owners have not started yet.
Read postAn investor sells a rental, the proceeds land with a qualified intermediary, and a 45-day clock starts that no weekend will pause. Here is how many properties you can name, in what form, and what happens when you name too many.
Read postA landlord who never depreciated a rental does not amend eight old returns. One Form 3115, filed with the current year's return, deducts every skipped dollar at once as a §481(a) adjustment. Here is how the catch-up works and when you can actually use it.
Read postThe new roof goes on the depreciation schedule for 27.5 years. The old roof can come off the return as a loss this year, plus the tear-off costs, but only if you claim it on the original return for the year the roof came off the building.
Read postA gain rolled into a qualified opportunity fund today defers only to December 31, 2026, with no basis step-up, so the deferral is gone almost as soon as you claim it. Wait until 2027 and OBBBA's OZ 2.0 gives a rolling five-year deferral plus a 10% step-up, 30% in a rural fund. The 180-day rules are what let a 2026 gain make the trip. Here is the math.
Read postA rental with an average guest stay of seven days or less is not a 'rental activity' under §469, so its losses are not automatically passive. Materially participate, and a cost segregation study can drop a six-figure loss straight onto your W-2 income, no 750-hour real estate professional test required. Here is the 2026 math and the three places it quietly fails.
Read postTwo years of living in a former rental does not turn the whole gain tax-free. Since 2009, §121(b)(5) splits the gain between the years you rented and the years you lived there, and the depreciation you claimed never qualifies at all. Here is the three-step math to run before you move in.
Read postTwo strategies, cost segregation paired with a short-term rental or a spouse who qualifies as a real estate professional, can convert paper losses on real estate into deductions against W-2 income for households earning $500k and up.
Read postIf a cost segregation study or a 1031 exchange is on your radar, the most valuable conversation is the one before the closing. We model the numbers, coordinate the cost seg, and file the elections, so the strategy survives the IRS, not just the spreadsheet.