Swings &
Equity

This is the most important question in the room — and the answer is yes, if structured correctly. The IRS doesn't care if you have help. What they care about is that you are materially participating in the property. That means you're making the decisions: approving bookings, directing vendors, reviewing financials, coordinating maintenance. Your manager executes. You own the process.

The key is documentation. You need a work log — dates, tasks, time spent — that demonstrates your active involvement. The most common IRS test requires 500+ hours of participation per year, or that you're the most active participant in the activity. A good CPA will tell you exactly which test applies to your situation and what counts toward your hours.

Think of your property manager as a contractor you direct — not someone running your business independently. That distinction is everything.

When you buy a rental property, the IRS allows you to deduct the wear and tear on the building over time. Normally this is spread across 27.5 years. A cost segregation study reclassifies components of the property — flooring, appliances, fixtures, landscaping — into shorter depreciation schedules of 5, 7, or 15 years, and then bonus depreciation allows you to take 100% of those deductions in Year 1.

For a W-2 earner, this creates a paper loss that offsets your ordinary income — meaning your taxable income drops significantly the same year you acquire the property. On a $350K acquisition, that can mean $80K–$100K in deductions hitting in Year 1 alone.

The large Year 1 deduction is the biggest, but the strategy doesn't end there. You continue to benefit from ongoing depreciation, cash flow, and appreciation through the holding period. The long-term play is to either continue acquiring properties to keep generating new deductions, execute a 1031 exchange when you sell (deferring capital gains into a new property), or hold and let the asset appreciate.

Depreciation recapture is real — when you sell, the IRS will tax the deductions you took at up to 25%. This is why the exit strategy matters as much as the entry. We cover the full timeline at the workshop.

When your Airbnb generates 1099 income, you become eligible for a Solo 401(k) or Solo Roth IRA — retirement vehicles with contribution limits far beyond what your W-2 allows. In 2025, a Solo 401(k) allows up to $70,000 in combined contributions. That's tax-advantaged retirement growth stacked on top of the depreciation benefit you're already capturing.

The strategy compounds: depreciation reduces your tax bill now, cash flow funds your retirement accounts, and appreciation builds long-term wealth. Three benefits from one asset.

No. This workshop is designed for people at every stage — whether you own multiple investment properties or you're exploring your first acquisition. The goal is to leave with a clear picture of whether this strategy fits your situation, what it would take to execute, and who to call next. There is no pitch and no pressure to buy anything.