{ “@context”: “https://schema.org”, “@type”: “FAQPage”, “mainEntity”: [ { “@type”: “Question”, “name”: “How does the $25,000 passive loss allowance work for rental property owners?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The $25,000 allowance is the ‘consolation prize’ passive loss rule for middle-income rental property owners. If your AGI is under $100,000 and you actively participate in your rental, you can deduct up to $25,000 in rental losses against your W-2 income. The allowance phases out at $50 cents per dollar of AGI between $100,000 and $150,000. For most Tempe investors earning above $150,000, this allowance is completely phased out — making REPS or the STR loophole the only paths to unlocking rental losses. KDA’s team will identify which strategy applies to your income level.” } }, { “@type”: “Question”, “name”: “What real estate deductions do most investors miss?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Beyond the obvious deductions (mortgage interest, property taxes, insurance, repairs), Tempe investors commonly miss: start-up costs for new properties, legal and professional fees for entity formation, cost segregation on existing properties, the home office deduction for portfolio management, vehicle expenses for property-related travel, and the QBI (qualified business income) deduction if your rental qualifies. KDA’s comprehensive deduction review typically uncovers $5,000–$25,000 in missed deductions for new clients.” } }, { “@type”: “Question”, “name”: “Does Arizona have any special tax incentives for real estate investors?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Beyond the 2.5% flat income tax, Arizona offers real estate investors: (1) no state estate or inheritance tax — your heirs keep more; (2) Opportunity Zone investments in designated Tempe areas for additional capital gains deferral; (3) relatively low property tax rates compared to national averages; (4) no tax on long-term residential rental income at the state TPT level; and (5) a business-friendly regulatory environment that makes operating rental properties simpler than in many other states. KDA’s Tempe team will ensure you’re capturing every Arizona-specific tax advantage.” } }, { “@type”: “Question”, “name”: “How do I optimize my real estate tax strategy if I’m a high-income W-2 employee?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “High-income W-2 employees in Tempe are the ideal clients for real estate tax strategy because they have the most to gain. At a 37% federal rate plus 13.3% California state tax (or 2.5% Arizona), every dollar of real estate loss that offsets W-2 income saves 50%+ in taxes. The STR loophole is the fastest path: buy a short-term rental in a strong market, materially participate (document 100+ hours), and generate $50,000–$200,000 in first-year losses through cost segregation + bonus depreciation. KDA’s Tempe real estate CPA team will model the exact tax savings for your income level and design the implementation plan.” } }, { “@type”: “Question”, “name”: “When should a real estate investor hire a CPA?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “You should hire a real estate CPA the moment you own a rental property, are considering a 1031 exchange, have a short-term rental, or are planning to sell investment real estate. These are all events with major tax implications that require proactive planning. Waiting until tax season means missing opportunities that can only be captured during the tax year. KDA’s Tempe team works with clients year-round, not just in April.” } }, { “@type”: “Question”, “name”: “What is bonus depreciation and how does it work for real estate in 2026?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Bonus depreciation is the turbocharger for cost segregation studies. Without bonus depreciation, reclassified assets are depreciated over 5, 7, or 15 years. With 100% bonus depreciation (restored permanently in 2025), those same assets are fully deducted in year one. For a Tempe investor buying a $1M commercial property, this can mean $300,000–$400,000 in first-year deductions — potentially eliminating your entire tax liability for the year and creating a net operating loss to carry forward.” } }, { “@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 Tempe investors, that difference is often tens of thousands of dollars annually.” } }, { “@type”: “Question”, “name”: “What records should I keep for my rental properties?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Good records are your first line of defense in an IRS audit. For Tempe rental property owners, the most critical records are: basis documentation (to calculate gain on sale), depreciation schedules (to track accumulated depreciation and recapture), expense receipts (to support deductions), and time logs (for REPS or STR loophole claims). KDA’s real estate CPA team provides clients with a complete record-keeping framework and conducts annual reviews to ensure your documentation is audit-ready.” } }, { “@type”: “Question”, “name”: “How do I calculate my basis in a rental property?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Calculating basis for a Tempe rental property requires tracking several components: (1) original purchase price plus closing costs; (2) plus capital improvements over the ownership period; (3) minus accumulated depreciation (including cost segregation deductions); (4) minus any casualty losses claimed. The resulting ‘adjusted basis’ determines your taxable gain when you sell. Many investors underestimate their accumulated depreciation, leading to surprise tax bills at sale. KDA’s team maintains detailed basis schedules and models your gain exposure annually.” } }, { “@type”: “Question”, “name”: “What is the Section 121 exclusion and can I use it for investment property?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The Section 121 exclusion allows homeowners to exclude up to $250,000 ($500,000 married) of capital gains from the sale of their primary residence, provided they’ve owned and used it as their primary residence for at least 2 of the last 5 years. Investment properties do NOT qualify for the Section 121 exclusion. However, if you convert an investment property to your primary residence, live in it for 2+ years, and then sell, you may qualify for a partial exclusion. The exclusion does NOT apply to depreciation recapture — that portion is always taxable. KDA’s Tempe team will model the Section 121 opportunity for any investment property you’re considering converting.” } } ] }