305. Passive or Non-Passive: What’s New for Short-Term Rentals in 2025
whatshot 10 snips
Dec 28, 2024
Discover the latest on short-term rental loophole updates! Dive into passive activity rules that can enhance your strategy. Learn about the material participation tests and how to qualify. Uncover cost segregation and bonus depreciation for massive tax savings. Plus, avoid common mistakes to keep your business audit-proof. Get insights on upcoming changes for 2025 and local regulations, essential for high-income earners eager to slash their tax bills.
29:51
forum Ask episode
web_stories AI Snips
view_agenda Chapters
menu_book Books
auto_awesome Transcript
info_circle Episode notes
insights INSIGHT
Passive Activity Rules
The passive activity rules prevent high-income earners from offsetting their non-passive income with rental real estate losses.
Real estate professional status or the short-term rental strategy are required to bypass these rules.
insights INSIGHT
Real Estate Professional Status
Qualifying as a real estate professional involves spending 750+ hours, over half of your working time, in real estate.
It is nearly impossible for individuals with full-time jobs outside real estate to qualify.
insights INSIGHT
Short-Term Rental Loophole
The short-term rental loophole allows rentals with average customer stays of 7 days or less to be treated as businesses.
This avoids the passive activity loss restrictions by classifying them as non-passive income.
Get the Snipd Podcast app to discover more snips from this episode
In this episode, Thomas and Ryan walk you through the short-term rental loophole updates to keep an eye on this year.
This episode explores:
- The passive activity rules and why the short-term rental strategy is a game-changer.
- Material participation tests and the most popular ways to qualify.
- How to use cost segregation and bonus depreciation for massive savings.
- Common mistakes to avoid and tips to set your business up for audit-proof success.
- Changes to expect in 2025 and navigating local regulations.
This episode is for any high-income earner or real estate investor looking to save five to six figures in taxes. Plus, learn about resources to ensure you're leveraging every possible strategy to minimize your tax bill.
To become a client, request a consultation from Hall CPA, PLLC at go.therealestatecpa.com/3KSEev6
Want crucial tax tips? Subscribe to our newsletter:
https://www.therealestatecpa.com/subscribe
Join the Tax Smart Insiders Community:
go.therealestatecpa.com/3Xx1Cpd
Check out Thomas's new YouTube channel: www.youtube.com/@thomascastelli
The Tax Smart Real Estate Investors podcast is for general information purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Information on the podcast may not constitute the most up-to-date legal or other information. No reader, user, or listener of this podcast should act or refrain from acting on the basis of information on this podcast without first seeking legal and tax advice from counsel in the relevant jurisdiction. Only your individual attorney and tax advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained or mentioned within the podcast show and show notes do not create a relationship between the reader, user, or listener and podcast hosts, contributors, or guests.
Tax Smart Real Estate Investors Podcast