{ “@context”: “https://schema.org”, “@type”: “FAQPage”, “mainEntity”: [ { “@type”: “Question”, “name”: “What is depreciation recapture and how do I minimize it?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Depreciation recapture is the ‘tax debt’ you accumulate as you take depreciation deductions. When you sell, the IRS taxes recaptured depreciation at 25% — higher than the 15–20% long-term capital gains rate. On a property where you’ve taken $200,000 in depreciation, that’s $50,000 in recapture tax. The best minimization strategy is a 1031 exchange, which defers both capital gains and recapture indefinitely. KDA’s Dewey-Humboldt team models your recapture exposure and builds exit strategies into your plan from the beginning.” } }, { “@type”: “Question”, “name”: “What is the Section 121 exclusion and can I use it for investment property?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Section 121 is the primary residence exclusion — not an investment property tool. But for Dewey-Humboldt investors, there is a strategic opportunity: convert an investment property to your primary residence, live there for 2+ years, and then sell with up to $500,000 in tax-free gains. The catch: depreciation recapture is not excluded (it’s taxed at 25%), and gains attributable to periods of non-qualified use (when it was a rental) are not excluded. KDA’s team will model whether a primary residence conversion makes sense for your specific property.” } }, { “@type”: “Question”, “name”: “What is the tax treatment of real estate crowdfunding investments?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Real estate crowdfunding platforms (Fundrise, CrowdStreet, RealtyMogul) typically structure investments as LLCs or limited partnerships, issuing K-1s to investors. The tax treatment mirrors direct real estate ownership: you receive your share of rental income, depreciation, and gains. The key advantage: you get real estate tax benefits (depreciation, potential QBI deduction) without active management. The key challenge: K-1s from crowdfunding platforms are often issued late (September–October), requiring tax return extensions. KDA’s Dewey-Humboldt team will integrate your crowdfunding K-1s into your overall real estate tax strategy.” } }, { “@type”: “Question”, “name”: “What is the difference between active, passive, and portfolio income for real estate investors?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Understanding the three income categories is fundamental to real estate tax planning for Dewey-Humboldt investors. Rental income is passive — no self-employment tax, but losses are trapped in the passive bucket unless you qualify for REPS or the STR loophole. Capital gains from property sales are portfolio income — taxed at favorable long-term rates (0%, 15%, or 20%) plus NIIT for high earners. Active real estate income (flipping, real estate agent commissions) is subject to both income tax and self-employment tax. KDA’s team will structure your activities to minimize taxes across all three categories.” } }, { “@type”: “Question”, “name”: “What is the QBI deduction and does it apply to rental real estate?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The 20% QBI deduction is one of the most valuable deductions available to Dewey-Humboldt real estate investors — but it requires careful qualification. Rental real estate qualifies if: (1) you qualify for REPS; (2) your STR qualifies under the STR loophole; or (3) you meet the rental real estate safe harbor (250+ hours of rental services, contemporaneous records). The deduction is limited for high-income taxpayers (phase-outs apply above $197,300 single / $394,600 married in 2026). KDA’s team will determine your QBI eligibility and maximize the deduction.” } }, { “@type”: “Question”, “name”: “Is Arizona a good state for real estate investors from a tax perspective?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Yes — Arizona is an excellent state for real estate investing from a tax perspective. The 2.5% flat income tax means you keep more of every dollar of rental income and capital gains. No estate tax means your heirs inherit your portfolio without a state-level death tax. The TPT exemption for long-term residential rentals simplifies compliance. And Arizona’s Opportunity Zones in Dewey-Humboldt provide additional capital gains deferral opportunities. KDA’s Dewey-Humboldt real estate CPA team will show you exactly how Arizona’s tax structure improves your after-tax investment returns.” } }, { “@type”: “Question”, “name”: “What is the 14-day rule for vacation rental properties?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The 14-day personal use rule is critical for Dewey-Humboldt STR owners who also use their property personally. If personal use exceeds 14 days (or 10% of rental days), the IRS classifies the property as a vacation home, limiting deductions to rental income and eliminating the ability to generate a tax loss. To preserve the STR loophole, personal use must stay at or below 14 days per year. KDA’s team will set up a personal use tracking system and advise on the optimal balance between personal enjoyment and tax optimization.” } }, { “@type”: “Question”, “name”: “How does the One Big Beautiful Bill Act affect real estate investors in 2026?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, is the most significant tax legislation for real estate investors since the Tax Cuts and Jobs Act of 2017. Key provisions for Dewey-Humboldt investors: (1) 100% bonus depreciation permanently restored for qualifying property placed in service after January 19, 2025; (2) TCJA individual income tax rates made permanent (37% top rate); (3) QBI deduction made permanent at 20%; (4) Section 179 limit increased; (5) estate tax exemption increased. For real estate investors, the permanent restoration of 100% bonus depreciation is the headline provision — it transforms cost segregation strategy from a temporary to a permanent planning tool.” } }, { “@type”: “Question”, “name”: “How much can I save with a cost segregation study on my rental property?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Cost segregation ROI is typically 10:1 to 30:1. A study costing $5,000 on a $600,000 Dewey-Humboldt rental property might generate $120,000–$180,000 in accelerated deductions and $44,000–$66,000 in immediate tax savings. The One Big Beautiful Bill Act’s permanent restoration of 100% bonus depreciation in 2025 makes this strategy even more powerful — you can write off the entire reclassified amount in year one rather than spreading it over 5–15 years.” } }, { “@type”: “Question”, “name”: “How much does a real estate CPA cost in Dewey-Humboldt?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Think of a real estate CPA not as a cost but as an investment with a measurable ROI. KDA clients in Dewey-Humboldt typically save $10,000–$50,000+ in taxes annually through strategies like cost segregation, bonus depreciation, and REPS election — savings that far exceed our fees. Schedule a free consultation and we’ll show you exactly what your portfolio can save.” } } ] }