Entity structure across a portfolio
Portfolios accumulate entities. A property per LLC for liability separation, a management company for operations, a holding structure above it. Each one carries filing obligations, state registration and a share of the administrative cost, and the structure that made sense at three properties often does not at fifteen.
We design the structure around liability separation, financing requirements, and how income needs to flow to the owners, then run the compliance across all of it on one calendar.
Cost segregation and depreciation
A building depreciated on the standard schedule recovers its cost slowly. A cost segregation study reclassifies components into shorter-life asset categories, accelerating deductions into the early years of ownership where they are worth the most in present value terms.
The study has to be engineering based to hold up, and the benefit has to be weighed against depreciation recapture on eventual sale. It is a timing strategy, not a permanent one, and it pays best when you know how long you intend to hold.
Passive activity rules and real estate professional status
Losses from rental activity are generally passive and cannot offset ordinary income. Real estate professional status changes that, but it carries strict hour and material participation tests that the IRS examines closely and that require contemporaneous logs to defend.
Where the status is genuinely available it is one of the most valuable positions in the code. Where it is not, claiming it is an expensive mistake. We assess it honestly and document it properly.
1031 exchanges and disposition planning
Like-kind exchange deadlines are unforgiving: identification within a fixed window from closing, completion within a longer one, with a qualified intermediary in place before the sale closes. Planning the exchange after the property is under contract is already late.
We model the exchange against the alternative of paying the tax, coordinate with the intermediary and counsel, and track basis across the chain of exchanged properties so that the eventual taxable event is calculated correctly years later.
Investor and lender reporting
Syndications and funds have reporting obligations to their investors: capital account tracking, preferred return calculations, waterfall distributions and K-1s that arrive on time. We run the partnership accounting and produce the reporting package on schedule.
Frequently asked questions
Is a cost segregation study worth it on a smaller property?
It depends on the building's cost basis, how much of it is allocable to shorter-life components, your marginal rate and your hold period. Below a certain basis the study cost outweighs the benefit, and we will tell you when that is the case.
Can rental losses offset my W-2 income?
Generally no, because rental activity is passive by default. Exceptions exist, including real estate professional status and the short-term rental treatment where average stays are brief and participation is material. Both are fact specific and both need documentation.
Do you prepare partnership returns and K-1s?
Yes, including capital account maintenance and distribution waterfalls for multi-investor structures.