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§ INDUSTRY · Real Estate

BOCA RATON · UPDATED MAY 2026

Schedule E done right. S-Corp only where it actually helps.

Per-property P&L, cost segregation coordination, §469 passive activity rules, REP status defense, and §1031 like-kind exchanges. IRS notice response on returns we prepare.

You buy real estate to build wealth, not to do tax accounting on Saturdays. But the rules — passive activity loss limits, REP status, cost seg, §1031 timing, the STR loophole — actually matter to the return. Most preparers either over-aggressive (S-Corp the rentals — wrong) or never-strategic. We take a contrarian-but-correct stance and document everything.

The vocabulary unique to your industry

Forms, acronyms, and deadlines we know cold.

Schedule E
Where rental income and expenses live on your 1040. One column per property. Depreciation, mortgage interest, repairs, and management fees all flow through here.
§469 passive activity
Rental losses are passive by default — usable only against passive income. The $25K active-participation exception phases out between $100K and $150K of AGI.
Real Estate Professional (REP)
IRC §469(c)(7). 750+ hours per year in real estate trades or businesses AND more than 50% of personal services. Unlocks active treatment of rental losses. Very hard with a W-2 job.
§1031 like-kind exchange
Defer capital gains on real-property sales by reinvesting in like-kind real property within 45/180-day windows. Post-TCJA, real property only.
Cost segregation
Engineering study that reclassifies portions of a building into 5/7/15-year property for accelerated depreciation. Typically worthwhile on properties $300K+.
STR "loophole"
Short-term rentals with average guest stays ≤7 days are not passive under §469. With material participation, losses offset ordinary income — even with a W-2.
Bonus depreciation phase-down
60% for property placed in service in 2024, 40% in 2025, 20% in 2026, 0% thereafter. Cost seg planning needs to account for the schedule.

How our three services apply to you

Three pillars, tuned to your industry.

§ 01 · Bookkeeping

Per-property P&L · capex vs. repair classification · loan-amortization tracking · STR vs. LTR segregation for tax characterization.

§ 02 · Tax

Schedule E + 1040 · K-1s from syndications · cost seg study coordination · REP-status time logs · §1031 exchange tracking.

§ 03 · IRS Help

Routine IRS notice response on returns we prepared: §469 passive-activity notice clarification · unreported STR income letters · cost-seg substantiation correspondence · CP2000 responses.

The S-Corp angle

S-Corp only where it actually helps.

Here's the contrarian-but-correct stance: do NOT put rental real estate in an S-Corp. S-Corps create phantom income when distributions exceed basis, trap depreciation inside the corporation, and complicate (or break) §1031 exchanges. Do S-Corp the management company, the flipping/wholesaling business, or your real-estate agent income — those are services, not rentals. We see clients every month who were S-Corp'd on rentals by a preparer who didn't know the difference. Fixing it is doable but painful.

§ Pricing

Flat fees. No hourly surprises.

  • Bookkeeping (per portfolio)

    from $325/mo

  • Schedule E + 1040

    from $850

  • Cost seg coordination

    from $500

§ FAQ

Should I put my rentals in an LLC, S-Corp, or my name?

For long-term rentals: an LLC (or a series of single-member LLCs, one per property) for liability protection, taxed as a disregarded entity on Schedule E. Do not S-Corp rentals — it creates phantom income when distributions exceed basis, traps depreciation inside the corporation, and complicates §1031 exchanges. For a flipping business, agent income, or a property-management company providing services, an S-Corp is fine and often beneficial because that income isn't rental income — it's ordinary trade-or-business income subject to SE tax that the S-Corp can mitigate. Holding rentals in your personal name is also legal but exposes other assets to liability. We size the structure to your portfolio and risk tolerance.

Cost seg — worth it on a $300K property?

$300K is roughly the bottom of the worth-it band, and the answer depends on the building-to-land ratio and how long you'll hold it. Cost segregation reclassifies portions of a building into 5/7/15-year property (carpeting, cabinetry, landscaping, electrical) for accelerated depreciation instead of 27.5- or 39-year straight-line. With 2024 bonus depreciation at 60%, a typical study on a $300K rental might pull $30K–$60K of deductions forward into year one. Study cost runs $2,500–$5,000 for a standalone single-family rental. We coordinate the study, integrate the results into your tax return, and model the recapture if you sell early.

REP status — do I qualify with a W-2 job?

Almost certainly not. IRC §469(c)(7) requires 750+ hours per year in real estate trades or businesses AND more than 50% of your personal services in real estate. A 40-hour W-2 job means you'd need 2,000+ real-estate hours to satisfy the "more than half" prong — practically impossible. The exceptions: a non-working spouse can be the REP and the couple files jointly to use the losses; quitting the W-2 mid-year and going full-time in real estate; or you're a real-estate agent already. If REP doesn't fit, look at the STR loophole instead — short-term rentals (≤7-day average stays) are not passive activities and can offset W-2 income with material participation.

1031 into a DST — yes or no?

Yes, with caveats. A Delaware Statutory Trust (DST) qualifies as like-kind real property under Rev. Proc. 2004-86, so a §1031 exchange into a DST defers the capital gain on your relinquished property. DSTs work well when you want to exit active management, you have a large gain to defer, and you can accept the trade-offs: no operational control, limited liquidity (typically 5–10 year holds), and sponsor fees that drag returns. They don't work when you want to keep refinancing/optimizing the asset or when the DST's structure won't accept your exchange timeline. We coordinate the QI, identify suitable DSTs through licensed sponsors, and integrate the basis carryover.

What deductions do most investors miss?

The classics: home-office for the real-estate operation (a legitimate deduction even if you self-manage from a desk), mileage to and from properties (67¢/mile in 2024) for inspections and maintenance, the cost of education and certifications, professional fees (us, your attorney, property managers), travel to evaluate out-of-state properties, and the de minimis safe harbor election ($2,500 per item under Reg. §1.263(a)-1(f)) that lets you immediately expense smaller capital purchases instead of depreciating them. Bigger misses: cost segregation on properties where it pencils out, and the partial-asset disposition election when you replace a roof or HVAC instead of capitalizing the new one on top of the old.

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