Northview STR & Real Estate Tax Advisors

05/22/2026

05/21/2026

Oh! The Augusta Rule-

Most “tax strategists” are getting the Augusta Rule wrong.

Here’s the version they pitch:

“Rent your house to your business for 14 days. Charge $3,000 per day. Take a $42,000 deduction. The IRS can’t touch it.”

That is not how this works.

In Sinopoli v. Commissioner, T.C. Memo. 2023-105, three S-corp owners claimed roughly $290,000 of home rental deductions over three years.

The taxpayers lost.

The Tax Court allowed only a small fraction of the deduction because two things were missing:

1. A reasonable rental rate

The rate has to be tied to actual local market comparables.

You cannot simply pick a number that creates the deduction you want.

In Sinopoli, the court looked to local hotel and meeting-space comparables and allowed roughly $500 per meeting instead of the much higher amounts claimed.

2. Real business purpose and documentation

The meetings need to be real.

That means agendas, attendees, minutes, business decisions, and records showing why the home was rented in the first place.

The Augusta Rule under IRC §280A(g) can still be useful.

If you rent your personal residence for fewer than 15 days during the year, the rental income may be excluded from your personal income.

But the business deduction still has to satisfy the normal rules.

The rent must be ordinary, necessary, reasonable, and properly documented.

A defensible file should include:

* Local comparable rates for similar meeting space
* A written rental agreement signed before the meeting
* A clear business purpose
* Meeting agenda and minutes
* Proof of payment
* Records of who attended and what was discussed
* Proper accounting treatment on the business books
* Consideration of issuing a Form 1099 from the business to the homeowner to further substantiate the payment trail and business reporting position

The Augusta Rule is not dead.

But the “pick a big number and call it tax-free rent” version should be.

05/19/2026

Most investors screw up 1031 exchanges for one reason:

They buy under pressure.

45 days to identify.
180 days to close.
So people force deals they shouldn’t just to avoid taxes.

There’s another strategy we sometimes discuss with real estate clients.

Not a true 1031 exchange.
But in the right situation, it can create a similar economic result.

Here’s the concept:

1️⃣ Sell the property
You sell an investment property and trigger gain.

That can mean:
• Capital gains tax
• Depreciation recapture
• State taxes

Potentially a very large tax bill.

2️⃣ Buy another investment property before year-end
Instead of following strict 1031 exchange rules:

• No qualified intermediary
• No identification deadlines
• No replacement property pressure
• More flexibility on timing and property selection

3️⃣ Perform a cost segregation study
This is where the planning happens.

A cost seg study accelerates depreciation into earlier years instead of spreading deductions over decades.

That can create significant paper losses upfront.

4️⃣ Use accelerated depreciation to offset the gain
Those depreciation deductions may reduce or offset taxable income created from the sale.

The result:
➡️ Sell one property
➡️ Buy another property
➡️ Generate accelerated depreciation
➡️ Potentially reduce taxes without a formal 1031 exchange

This strategy is not a replacement for a 1031 exchange in every situation.
But for some investors, it provides flexibility that a traditional exchange doesn’t.

As always:
Tax strategy should follow the investment.
Not the other way around.

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05/12/2026

🏠 Rental Property Owners: Are You Missing the QBI Deduction?

Many landlords may qualify for a deduction of up to 20% of their net rental income under the Qualified Business Income (QBI) rules.

The key? Your rental activity generally needs to rise to the level of a trade or business.

One common way to qualify is through the IRS Safe Harbor:
✔️ 250+ hours of rental services
✔️ Separate books and records
✔️ Good time tracking/documentation

And remember — hours from property managers, contractors, and agents may count toward the total.

Example:
$50,000 of qualifying rental income could create a $10,000 deduction.

This can be a major tax savings opportunity for real estate investors and landlords.

Now is the time to:
• Track rental hours
• Organize records
• Review property grouping strategies
• Plan ahead before year-end

Every situation is different, especially with higher incomes, multiple entities, or passive loss rules.



This is general information only and not tax advice.

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05/12/2026

💼 Tax Tip for Partnership Owners:

Thinking about gifting your partnership interest to a family member? Be careful with suspended passive losses (PALs).

If you gift the entire interest:
• Your suspended PALs do NOT become deductible
• The recipient cannot use them either
• Your basis increases before the transfer, but the losses effectively disappear

This catches many taxpayers by surprise during family wealth transfers and estate planning.

Always review basis, PAL carryovers, and gift tax filing requirements before making the transfer.

Educational purposes only — not tax advice.

11/28/2025

Are you a real estate investor tracking the right financial metrics?
If you’re not reviewing monthly cash flow and deal performance consistently, you’re flying blind — and missing opportunities.

📌 Monthly Cash Flow (Net & By Asset Type)
Cash flow is the heartbeat of every investment business. We track it separately for:
✔ Long-term rentals
✔ Short-term rentals
✔ BRRRR properties
✔ Flips (if they cash flow)

We break it down clearly by:
• Net cash flow
• Operating expenses
• Debt service
• Vacancy impact
• Management fees
• Seasonal trends (especially for STRs)

Why it matters ➜ Investors make decisions FAST. Clean monthly cash flow helps you know whether to buy, hold, or sell.

📊 Deal Performance KPIs
High-level metrics that show whether a deal is actually working — including:
• ROI
• Cash-on-cash return
• Internal rate of return (IRR)
• Equity growth
• And more depending on the strategy

🔥 As year-end approaches, bookkeeping becomes absolutely critical for maximizing tax savings.
Missing expenses, mis-categorized assets, incorrect depreciation, or poor timing can cost investors thousands in unnecessary taxes.
Clean books = clean tax strategy.

📥 If bookkeeping feels overwhelming or you’re not getting investor-ready numbers — we can help.
We specialize in bookkeeping for real estate investors, including STRs, LTRs, partnerships, and BRRRRs. You’ll receive clean monthly financials + proactive tax savings support at year-end.

👉 Message us or email us at [email protected] to get started.
Let’s take bookkeeping off your plate so you can focus on scaling your portfolio — while we make sure you keep more of your profits.

11/28/2025

📣 STR Investors — Let’s Clear Up a Big Tax Question for 2025

We’re hearing this a lot already:

“If I have a property manager for my Airbnb, can I still qualify for material participation and make the income active so I can take losses against my W-2 income?”

The honest answer ➜ It depends.
It’s difficult to meet the material participation requirements when a property manager is involved — but not impossible.

To treat STR income as non-passive (active) and potentially take losses against W-2 income, you must satisfy one of the IRS material participation tests. The two most common:

- 100+ hours and more than anyone else, OR
- 500 hours total involvement

When a property manager handles most decisions, scheduling, and guest communication, it becomes harder to prove that you spent more time than they did.

However — some STR owners can still qualify if they are heavily involved in things like:

• Setting pricing and policies
• Approving repairs and major decisions
• Handling guest messaging directly
• Coordinating cleaners and vendors
• Actively managing the calendar and operations

The key factor is time — and who puts in the most.

For some owners, material participation is achievable. For others, the involvement level isn’t high enough. Every situation is different, and the IRS test is based on facts and documentation — not titles.

⸻

If you’re not sure where you fall, we can review your participation and your property manager’s scope to determine the most accurate and tax-advantageous position.

📩 Message us to schedule an STR tax strategy consult.

Northview – Real Estate Tax Advisors
Helping investors keep more of what their properties earn. 🏡

08/12/2025

🏠💰 Rental Property Owners: Don’t Let the 3.8% Tax Catch You Off Guard! 💰🏠

If your rental real estate income is considered passive, the IRS may hit you with the 3.8% Net Investment Income Tax (NIIT) on top of your regular taxes.

🔍 When NIIT Can Apply to Rentals:
• Your Modified Adjusted Gross Income (MAGI) is over $250k (MFJ) / $200k (Single).
• Your rental activity is passive — meaning you don’t materially participate.
• You have capital gains from selling rental properties or passive real estate partnerships.

✅ Ways to Avoid NIIT on Rentals:
1. Qualify as a Real Estate Professional under the IRS rules (more than 750 hours & materially participating).
2. Group activities to meet material participation tests.
3. Use the self-rental rule if renting to a business you actively run.
4. Time sales & income to manage MAGI below the thresholds.

📄 The NIIT is reported on Form 8960, and it’s often triggered without investors realizing it until tax time.

💡 Pro Tip: Even though retirement plan distributions (IRAs, 401ks) aren’t NII, they can raise your MAGI enough to trigger the tax — watch the chain reaction!

If you own rentals and want to review whether your income could be shielded from NIIT, now’s the time to plan — not in April.