Link: https://www.skool.com/taxes/classroom/ec6893ee?md=3c8da0d1960a4f7394e1598d68be62b0 Key Takeaways: Short-Term Rental (STR) Deductions & Expenses - Marketing and advertising for the rental (AI tools, Instagram, Facebook ads, photographers) are deductible, as are accounting and legal fees. - Tolls and mileage for travel to the STR are deductible as auto expenses, but the travel hours don't count toward material participation. - Hiring your child as a W-2 employee is still a good write-off after they turn 18, with one change: they become subject to FICA. Use a payroll provider like Gusto to move money from the rental to the child, and keep a job description and log of duties. A child with no other income can earn up to $16,100 in 2026 without filing a return. Material Participation & Hour Tracking - Log actual time, not estimates. Avoid generic blocks (e.g., 15 minutes per guest message). For guest communication, respond through one app and screenshot weekly Screen Time as a precise record. - Don't count education or training hours (webinars, group calls), however they're labeled. - Don't log "supervising" time. For contractors, count only time you actually spent communicating with them. - Audit flag: 600+ hours on a single property is rare and draws attention. Kevin has seen it only a handful of times across hundreds of clients. - Track as you go, not at year-end. Recommended tools: REPS Tracker, REPS Log, Toggl, Clockify, or a spreadsheet. The best tracker is the one you'll actually use. - Mileage: MileIQ works but is clunky. A simple spreadsheet or form log is a good alternative. Material Participation Tests (for STRs) - 100 hours and more than anyone else is the most popular test, but it requires tracking everyone else's time, including cleaners and possibly contractors. - 500-hour test is often easier with 2–3 STRs. You don't need to track others' hours, and it's how people self-manage the first few properties, then hand later ones to property managers. - Grouping election is essential on the tax return when combining STRs for the 500-hour test. - There are seven tests in total, so alternatives exist if one fails. - Real estate professional status (REPS) offers no benefit if you only have STRs. It matters when you also have long-term rentals.

Link: https://www.skool.com/taxes/classroom/ec6893ee?md=24c1e1720b1b4cea9f853c936cb3a8a6 Key Takeaways: 1. Deducting expenses as a 1099 contractor or sole proprietor - You don't need an LLC to deduct business expenses. A 1099 earner is automatically a sole proprietor and can deduct ordinary and necessary expenses against that income. - Unreimbursed out-of-pocket costs tied to the work (seminars, training, travel) generally qualify. - Keep a paper trail. A bank statement, Zelle/Venmo record, or credit card statement is usually enough, so you don't need the vendor to invoice you. Categorize each expense in QuickBooks or Excel (e.g., professional development, conference, travel). - Deductions are limited to the income that activity produces. - Once self-employed, you can also deduct accounting and legal fees (not possible as a W-2 employee), a home office, and a business share of your phone and internet. - The School community has a Self-Employed Profit & Loss template that lists the deductible categories. 2. Business travel with a personal element - Be conservative. If a trip mixes business and personal, allocate a percentage you're comfortable defending (e.g., 60-70%) rather than deducting 100%. - For genuine business trips, document the agenda, meetings held, and purpose in case of an audit. - If you have more than one business activity, allocate shared costs like a phone across them, but never claim more than 100% in total. 3. Short-term rental (STR) mileage - Deductible miles include trips from your home office to the rental and to supply stores such as Home Depot. - Tracking options, from strongest to weakest: - A mileage app (MileIQ), though it can be tedious to mark non-business trips. - A calendar or Excel log with date, purpose, and miles. - An estimate (e.g., 40% of annual miles), which carries more audit risk. - Mason's DIY approach: an iOS shortcut triggered by CarPlay that sends a Google Form feeding a spreadsheet, which makes logging opt-in instead of opt-out.

Link: https://www.skool.com/taxes/classroom/ec6893ee?md=a4d38121a3154979a9f52d04cd5e46be Key Takeaways: 1031 Exchange with a Price Bump - A seller with a $400K rental under a lease-purchase option was asked by the buyer to add $40K to the sale price, financed into the mortgage and returned via escrow to reduce the buyer's cash at closing. - A 1031 exchange is based on the net purchase price (after closing costs), so the bump likely isn't a federal issue on its own. - Fannie/Freddie conventional loans typically cap seller assists at about 6%, so a 10% bump could create underwriting and appraisal problems. Documents should never misrepresent the deal. - The seller was advised to check with the buyer's underwriter and their own 1031 intermediary. - The $30K non-refundable option deposit was treated as prepaid purchase price, and secured vs. unsecured likely doesn't matter. The hosts will research further in the kickoff call. Cost Segregation and Bonus Depreciation - A cost seg can be done after acquisition by filing Form 3115, which typically costs $600 to $1,000. - One attendee was quoted $2,750 for the form, which the hosts said was by far the highest they'd seen. It likely reflected the cost seg itself. - Avoid a cost seg in a low-income year, since deductions are worth more at higher brackets. - If income is low, pair the cost seg with a Roth conversion to absorb the deduction. There's no refund this year, but it saves taxes over a lifetime. - Run a tax projection first (about 2 weeks turnaround) and submit by November 1st for year-end planning. - Referral companies mentioned were RE Cost Seg (10% discount) and CSSI. Short-Term Rental to Long-Term Rental - Trying an STR for one year and switching to long-term if it underperforms is fine, as long as the first year meets the requirements. - Don't flip back and forth annually for tax benefit. A one-time pivot with a real business reason is defensible.

Link: https://www.skool.com/taxes/classroom/ec6893ee?md=5b763541bd6d49fdbd01a592b2d032ae Key Takeaways - Q4 is planning season: Review revenue and expenses now and decide which levers to pull before December 31 (another property, business vehicle, Solo 401(k), HSA, pre-tax 401(k)). - Deadlines: Individual 2025 extended returns are due October 15, so get any cost segregation study done in the next two weeks. - Accelerate or defer based on your year: If this year has big write-offs (cost seg, bonus depreciation) and next year will be lighter, defer expenses like HOA, accounting, and attorney fees into January and consider pulling income forward. - Prepay only when this year is the higher-income year: Deductions are most valuable in the year with income to absorb them. - House hacking works well: Record your move-in date, since depreciation on the personal-use portion stops then. - Furnish before you move in: Pay for furnishing and renovations beforehand so they're deductible as rental expenses. - Home sale exclusion: Prior residency still counts toward the two-of-five-years rule. - Short-term rental conversion: Furniture and items like a sauna qualify for 100% bonus depreciation for 2026 and later. - Cost seg is borderline under roughly $200K to $250K, and may not make sense if you plan to move back in, due to depreciation recapture. - STR qualification: You need at least two stays with an average under seven days, plus 100 hours of participation (spouses' hours combine). - What counts as hours: Hours count from when you're under contract. Furniture assembly, repairs, staging, and bookkeeping count. Travel from your primary home and tax strategy calls don't. - Documentation: Keep an hours tracker and a ledger. Bank, card, Venmo, and Zelle statements serve as the paper trail. - Interest: Mortgage and HELOC interest is deductible when used for the rental. - Passive losses: Losses from long-term rentals carry forward indefinitely. - Long-term outlook: You don't need to buy a property every year, so stay realistic about what you can manage. - Real estate professional status: If a household has no W-2 income, a spouse may qualify. - Trusts: Your attorney and title company handle moving properties into a trust. - First death: The deceased spouse's share generally gets a step-up in basis and typically needs its own EIN. Review the "upon first death" provision with an experienced real estate attorney. - Tools: Baseline is a recommended landlord bookkeeping app that tracks by property. Use a separate rental bank account. - Hiring family: Pay family members through a real payroll service like QuickBooks or Gusto to make the deduction legitimate.

Link: https://www.skool.com/taxes/classroom/ec6893ee?md=6b22b282f348487e876e47ca231b5b2b Here's a summary of the key takeaways from this Friday Q&A session: Firm Updates & Logistics - BudgetDog Tax split: Brennan and BudgetDog Tax are moving to a new interface with new advisors. Kevin, Ryan, Mason, and the team continue as Tax Strategy 365, with the same admins, preparers, and reviewers. - Pricing for former BudgetDog clients: A discount of roughly 20% was mentioned. Request 2027 pricing and engagement letters by opening a thread in TaxDome. Pricing is finalized; the delay was due to the Sept 15 extension deadline. - Services stay the same: Kickoff call, deep-dive calls, check-in calls, an end-of-year tax projection, and unlimited Q&A (in TaxDome or on Friday calls). For hard questions, use TaxDome so Kevin can research first. - Billing questions: Go through TaxDome so the billing team can review. Starting a New Business - No profit threshold: You don't need to hit a revenue number to deduct expenses. You need a profit motive and good records. Most businesses show tax losses in the first years. - Separate everything: Open a dedicated business bank account and business credit card (no-annual-fee cards recommended). Track in QuickBooks Online (the "gold standard" for businesses, though not for rental properties). - Deductible examples: Software, website, marketing, photographers/videographers, supplies, licenses, professional fees, trainings, masterminds, networking, and AI tools. - Home office: Measure the square footage of the dedicated space. The simplified method caps at 300 sq ft ($5/sq ft = $1,500). It's allowed per business activity, so spouses with separate businesses can each claim one. - Phone/internet: Deduct the business-use percentage (e.g., 40% of $1,000 = $400). - Mileage: 72 cents per mile was quoted in the session. A log isn't required to file but is your audit protection. A reasonable percentage-based estimate is better than nothing. - Losses can offset a spouse's income on a joint return, such as a W-2 job.