{ “@context”: “https://schema.org”, “@type”: “FAQPage”, “mainEntity”: [ { “@type”: “Question”, “name”: “How does the tax treatment of real estate differ for foreign investors?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Foreign investors in San Diego real estate face a distinct set of tax rules. Key issues: (1) FIRPTA withholding — when a foreign person sells U.S. real estate, the buyer must withhold 15% of the gross sale price (not just the gain) and remit it to the IRS; (2) rental income is subject to 30% withholding tax on gross income (unless reduced by treaty or an election to treat rental income as effectively connected income, allowing deductions); (3) estate tax — foreign persons are subject to U.S. estate tax on U.S. real estate with only a $60,000 exemption (vs. $13.6M+ for U.S. citizens). KDA’s San Diego team advises foreign investors on structuring U.S. real estate investments to minimize these burdens.” } }, { “@type”: “Question”, “name”: “What does a real estate CPA do that a regular CPA doesn’t?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The difference comes down to proactive strategy versus reactive compliance. A regular CPA files what happened. A real estate CPA at KDA Inc. plans what will happen — structuring your acquisitions, timing your cost segregation studies, advising on 1031 exchanges before you sell, and ensuring your entity structure maximizes every deduction available under the tax code. For San Diego investors, that difference is often tens of thousands of dollars annually.” } }, { “@type”: “Question”, “name”: “What is the difference between the STR loophole and Real Estate Professional Status?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The STR loophole is the ‘shortcut’ version of REPS for W-2 earners. REPS requires you to be a full-time real estate professional (750+ hours, majority of working time). The STR loophole only requires material participation in a specific short-term rental activity — which can be achieved with 100+ hours per year if no other person spends more time on the activity. Both strategies generate the same result: rental losses that offset active income. KDA’s San Diego team will determine which strategy fits your lifestyle and income profile.” } }, { “@type”: “Question”, “name”: “What is a Delaware Statutory Trust (DST) and how does it work in a 1031 exchange?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “For San Diego real estate investors who want to do a 1031 exchange but don’t want to manage another active property, a DST is the ideal solution. You exchange your rental property into a fractional interest in a large institutional property — deferring all capital gains and depreciation recapture. The DST sponsor manages the property; you receive passive income distributions. DSTs are particularly popular with investors who are retiring from active management or who can’t identify a suitable replacement property within the 45-day identification window. KDA’s team will advise on DST selection and 1031 exchange compliance.” } }, { “@type”: “Question”, “name”: “How does real estate investing affect my ability to contribute to retirement accounts?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Real estate investing can both help and complicate retirement account contributions. If your rental income is passive (not subject to FICA), it does not count as ‘earned income’ for IRA contribution purposes — you need W-2 or self-employment income to contribute to a traditional or Roth IRA. However, if you qualify for REPS or the STR loophole, your real estate income may be treated as active income, potentially increasing your earned income for retirement contribution purposes. KDA’s San Diego team will analyze your income mix and optimize your retirement contribution strategy.” } }, { “@type”: “Question”, “name”: “How does the at-risk rules limitation affect real estate investors?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The at-risk rules (IRC Section 465) limit your deductible losses to the amount you have ‘at risk’ in the activity — generally your cash investment plus any recourse debt for which you are personally liable. For real estate, qualified nonrecourse financing (loans from commercial lenders secured by the property) is treated as at-risk, which is a special exception that makes real estate more favorable than other investments. Most San Diego real estate investors are not limited by the at-risk rules because their mortgage debt qualifies as at-risk. KDA’s team will confirm your at-risk status and ensure your losses are fully deductible.” } }, { “@type”: “Question”, “name”: “What is the tax treatment of real estate crowdfunding investments?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The tax reporting for real estate crowdfunding is more complex than most San Diego investors expect. Each platform investment generates a K-1 (often late), and the passive activity rules apply to losses. Some platforms conduct cost segregation studies that generate large depreciation deductions — but these passive losses are only useful if you have passive income to offset or qualify for REPS. KDA’s San Diego real estate CPA team will review all your crowdfunding K-1s, track passive loss carryforwards, and integrate platform investments into your comprehensive tax strategy.” } }, { “@type”: “Question”, “name”: “What is bonus depreciation and how does it work for real estate in 2026?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “In 2026, bonus depreciation is back to 100% permanently thanks to the One Big Beautiful Bill Act. For real estate investors in San Diego, this means that any 5-, 7-, or 15-year property identified through a cost segregation study can be fully deducted in the year of acquisition. Previously, bonus depreciation had phased down to 60% in 2024 — the restoration to 100% is the single biggest tax change for real estate investors since 2017.” } }, { “@type”: “Question”, “name”: “When should a real estate investor hire a CPA?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “If you’re asking when to hire a real estate CPA, the answer is immediately. Every month without a tax strategy is a month of missed deductions. The IRS gives real estate investors extraordinary tax advantages — depreciation, cost segregation, 1031 exchanges, REPS — but only if you know how to use them. KDA’s San Diego team will audit your current tax position in a free consultation and show you exactly what you’ve been leaving on the table.” } }, { “@type”: “Question”, “name”: “How does California’s 13.3% income tax rate affect real estate investors?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The 13.3% California income tax rate is a major factor in every real estate investment decision for San Diego investors. It makes the 1031 exchange even more critical — a $500,000 capital gain triggers $66,500 in CA state tax alone, on top of $100,000+ in federal tax. It also makes the STR loophole and REPS more valuable — a $200,000 deduction saves $26,600 in CA taxes. KDA’s San Diego team incorporates California’s tax structure into every investment analysis and exit strategy.” } } ] }