Best of All Worlds Short Term Rental

Tax Strategies
1

Hi Mark,

After watching your terrific videos, we’re wanting to implement the Best of All Worlds short term rental plan.

  • Our rentals are an average of less than 7 days.
  • We Materially Participate in the work of the rental.
  • We do not provide Substantial Services.

We bought the rental in early 2022 and put about $50,000 into setting it up. Our tax preparer did the usual depreciation of a passive activity, carrying the excess expenses into the future.

I’d now like to do an ammended return, do the Best of All Worlds plan, plus Cost Segregation and Bonus Depreciation, but our tax preparer is skeptical. She thinks we need to be a company first, be a Real Estate Professional, use Schedule C and feels we’ll be at a high risk for Audit and be responsible for a 20% penalty.

What are your thoughts?

Thanks!

Russ