Smart Tax Strategies for Real Estate Investors
Real estate remains one of the most powerful paths to wealth, but it’s also one of the most complex when it comes to taxes. Whether you’re flipping, renting, or 1031 exchanging, having a strategic tax plan is essential.
At Holmes & Associates, we work with real estate professionals throughout Los Angeles and Long Beach to ensure they’re maximizing their deductions and staying compliant.
Key Considerations Before Year-End
1. Bonus Depreciation is Changing
2025 is one of your final chances to capitalize on elevated bonus depreciation. If you’ve placed assets in service this year, or plan to before year-end, you may be able to write off a substantial portion of those costs.
Pro tip: Pairing bonus depreciation with a cost segregation study can significantly reduce your tax burden.
2. Plan for Passive Activity Losses
If your real estate activities are considered passive, your losses may be limited, unless you qualify as a real estate professional. Now is the time to assess your hours and documentation.
3. Track Repairs vs. Improvements
What you call a “repair” and what the IRS considers an “improvement” are two very different things. Misclassification is a common audit trigger and can drastically impact your deductions.
Why Work With a Real Estate CPA in LA?
Navigating tax law as a property investor in California comes with state-specific nuances, local property tax considerations, and multi-entity ownership strategies. Our team knows the landscape and can help you stay ahead.
Ready to talk tax strategy? Call 562-495-3331 or book your free consult.