{ “@context”: “https://schema.org”, “@type”: “FAQPage”, “mainEntity”: [ { “@type”: “Question”, “name”: “How does real estate investing affect my FAFSA and financial aid eligibility?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Real estate investing and FAFSA planning require careful coordination for Scottsdale families with college-bound children. The FAFSA looks back at income from the prior-prior year — meaning a large rental income year or property sale can affect aid eligibility for 2+ years. Strategic planning around income timing, property sales, and cost segregation deductions can minimize the FAFSA impact. KDA’s Scottsdale real estate CPA team will model the FAFSA implications of your real estate decisions and help you optimize both tax savings and financial aid eligibility.” } }, { “@type”: “Question”, “name”: “Can a married couple use Real Estate Professional Status if only one spouse qualifies?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Yes — and this is one of the most powerful applications of REPS for high-income couples in Scottsdale. If one spouse qualifies as a real estate professional (750+ hours, majority of working time), the couple can use rental losses to offset the other spouse’s W-2 income on their joint return. A couple where one spouse earns $400,000 in W-2 income and the other qualifies for REPS with $200,000 in rental losses can save $74,000+ in federal taxes. KDA’s team will evaluate both spouses’ time allocations and structure the most advantageous approach.” } }, { “@type”: “Question”, “name”: “How does the tax treatment of real estate differ for foreign investors?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Foreign investors in Scottsdale 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 Scottsdale team advises foreign investors on structuring U.S. real estate investments to minimize these burdens.” } }, { “@type”: “Question”, “name”: “What expenses can I deduct for my Airbnb or short-term rental property?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Short-term rental owners in Scottsdale can deduct: mortgage interest, property taxes, insurance, utilities (if you pay them), cleaning and maintenance, property management fees, Airbnb/VRBO platform fees, furnishings and appliances (via bonus depreciation), linens and supplies, repairs, advertising and photography, professional fees (CPA, attorney), and depreciation on the building and improvements. If you use the property personally, deductions must be prorated between rental and personal use days. KDA’s Scottsdale team will ensure you capture every allowable deduction and apply the correct proration method.” } }, { “@type”: “Question”, “name”: “How does real estate investing affect my ability to contribute to retirement accounts?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Real estate investors in Scottsdale often overlook retirement account optimization as part of their overall tax strategy. If you have a property management company or other active real estate income, a Solo 401(k) allows contributions up to $69,000 per year (2026) — creating a massive additional deduction. If you qualify for REPS, your rental income may support even larger contributions. KDA’s real estate CPA team will integrate retirement account planning into your comprehensive tax strategy.” } }, { “@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 is one of the most valuable tax benefits in the entire tax code — but it’s limited to primary residences. For Scottsdale real estate investors, the strategic play is to convert a highly appreciated investment property to a primary residence, satisfy the 2-year use requirement, and then sell with up to $500,000 in excluded gains. This strategy requires careful planning around the non-qualified use rules and depreciation recapture. KDA’s Scottsdale real estate CPA team will model the tax impact and advise on whether the conversion strategy makes sense.” } }, { “@type”: “Question”, “name”: “What is the tax treatment of real estate professional fees and commissions?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Real estate professional fees — agent commissions, attorney fees, title insurance, escrow fees — are treated differently depending on whether they’re paid on acquisition or disposition. Acquisition costs (paid when buying) are added to your basis and depreciated over 27.5 or 39 years (or accelerated through cost segregation). Disposition costs (paid when selling) reduce your amount realized, directly reducing your taxable gain. For Scottsdale investors, properly categorizing and tracking all transaction costs can reduce taxes by thousands of dollars. KDA’s team will ensure all transaction costs are captured and treated optimally.” } }, { “@type”: “Question”, “name”: “How does Airbnb income get reported on my tax return?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Airbnb sends a Form 1099-K if you receive more than $600 in payments (2026 threshold). Your income is reported on Schedule E for most STRs, with all allowable deductions netting against gross rental income. If your property qualifies for the STR loophole (average stay ≤7 days, material participation), net losses can offset your other income. KDA’s Scottsdale team will ensure your Airbnb income is reported correctly, all deductions are captured, and your STR loophole eligibility is documented.” } }, { “@type”: “Question”, “name”: “What is the difference between Section 179 and bonus depreciation for real estate?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Section 179 is capped at your business income — it cannot create a loss. Bonus depreciation has no income limitation and can generate a net operating loss (NOL) that carries forward indefinitely. For a Scottsdale real estate investor with a large cost segregation study, bonus depreciation is almost always the better choice because it can wipe out your entire tax liability and create carryforward losses for future years. KDA’s team will model both options and choose the optimal approach for your situation.” } }, { “@type”: “Question”, “name”: “What is the difference between a real estate dealer and a real estate investor for tax purposes?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The IRS determines dealer vs. investor status based on facts and circumstances: frequency of sales, holding period, purpose of acquisition, and how you describe your activities. For Scottsdale investors who both flip and hold properties, the risk of dealer classification on held properties is real — the IRS may argue all your properties are held for sale. The solution: maintain separate entities for flipping (dealer) and long-term holds (investor), with clear documentation of intent for each property. KDA’s team will structure your entity architecture to protect your investor status.” } } ] }