{ “@context”: “https://schema.org”, “@type”: “FAQPage”, “mainEntity”: [ { “@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”: “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”: “How does the QBI deduction apply to rental real estate?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The Qualified Business Income (QBI) deduction allows eligible taxpayers to deduct up to 20% of qualified business income from pass-through entities. For rental real estate, the QBI deduction is available if your rental activity rises to the level of a ‘trade or business’ — either through the IRS safe harbor (250+ hours of rental services per year, with documentation) or by meeting the general facts-and-circumstances test. For a San Diego investor with $200,000 in net rental income, the QBI deduction could reduce taxable income by $40,000, saving $14,800 in federal taxes at the 37% rate. KDA’s team will determine if your rental activities qualify and document the safe harbor.” } }, { “@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.” } }, { “@type”: “Question”, “name”: “How does a cash-out refinance affect my taxes on rental property?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “A cash-out refinance on a rental property does NOT create taxable income — loan proceeds are not income. This is the basis of the ‘buy, borrow, die’ strategy: you access the equity in your San Diego rental properties through refinancing, spend the cash tax-free, and never trigger capital gains or depreciation recapture. The trade-off is that mortgage interest on the cash-out portion may be limited depending on how you use the proceeds. If used for investment purposes (buying more rentals), the interest is fully deductible. KDA’s team will structure your refinancing strategy to maximize deductibility.” } }, { “@type”: “Question”, “name”: “How much does a real estate CPA cost in San Diego?”, “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 San Diego 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.” } }, { “@type”: “Question”, “name”: “How does depreciation work for a rental property I converted from my primary residence?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Converting your primary residence to a rental triggers several tax considerations. Your depreciation basis is the lesser of your cost basis or fair market value at conversion. You lose the Section 121 exclusion ($250K/$500K) for appreciation that occurs after conversion. And if you sell within 5 years of conversion, you may still qualify for a partial Section 121 exclusion. KDA’s San Diego real estate CPA team will model all scenarios and advise on whether conversion makes sense for your specific situation.” } }, { “@type”: “Question”, “name”: “What is a cost segregation study and how does it save taxes?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “A cost segregation study is performed by a qualified engineer who physically inspects your property and identifies every component eligible for accelerated depreciation. The result is a detailed report that your CPA uses to dramatically front-load your depreciation deductions. KDA’s San Diego team works with certified cost segregation engineers and has helped clients generate $50,000–$300,000+ in first-year tax savings from a single study.” } }, { “@type”: “Question”, “name”: “What are passive activity loss rules and how do they affect real estate investors?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The passive activity rules are the primary obstacle for real estate investors trying to use rental losses to offset their W-2 income. Under Section 469, rental losses are passive and can only offset passive income — unless you qualify for REPS or the STR loophole. Suspended passive losses accumulate and are released when you sell the property or generate passive income. For San Diego investors with large suspended passive losses, a strategic sale or the right property acquisition can unlock years of accumulated deductions. KDA’s team will model your passive loss position.” } }, { “@type”: “Question”, “name”: “What is a 1031 exchange and how can a CPA help me use it?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The 1031 exchange is how the wealthiest real estate investors in San Diego build multi-generational wealth — by never paying capital gains tax during their lifetime. Every exchange defers the tax, and if you hold the replacement property until death, your heirs receive a stepped-up basis that eliminates the deferred gain entirely. KDA’s San Diego real estate CPA team has guided hundreds of exchanges and will ensure yours is structured to maximize deferral and minimize risk.” } } ] }