Friday Weekly Q&A Call - 06/26/2026 · 🏠 Lower Taxes w/ Ryan

Lyn Cueto

14d • 📸 Recorded Calls

Friday Weekly Q&A Call - 06/26/2026

Link: https://www.skool.com/taxes/classroom/ec6893ee?md=8a49ed2a22c64cd5811775404ffa0e68

Here's a summary of the key takeaways from this session:

Hold vs. Sell

Flips are taxed at ordinary income rates (up to 37%) and forfeit long-term appreciation — holding is almost always the better long-term play
The BRRRR method lets you pull capital out while keeping the asset
Sometimes selling a primary residence before converting it to a rental is smarter — the $250K/$500K Section 121 exclusion disappears once rental use kicks in
1031 exchanges are a tool to defer gains and upgrade into a better-performing property

STR Depreciation Strategy

A cost segregation study in year one can fully expense 5-year property (furniture, fixtures, flooring, lighting, appliances) and 15-year property (land improvements) via bonus depreciation
The remaining structure (39-year commercial / 27.5-year residential) continues depreciating annually — you'll still have $10K–$20K+ in depreciation each year going forward
If you sell early, depreciation recapture tax applies at ~25%
The 100-hour material participation test for the STR loophole applies per property — adding a second STR means tracking 100+ hours for that property separately

W-2 Withholding

Divide federal tax withheld YTD by total gross wages YTD to find your effective withholding rate
Compare that to last year's return: line 24 (total tax) ÷ taxable income = your average tax rate
If those percentages are misaligned, submit a corrected W-4 to HR
Large commission or bonus checks must be coded by payroll as bonuses — if coded as regular wages, the system annualizes the amount and massively over-withholds
You can add a flat extra dollar amount per paycheck on the W-4 to fine-tune withholding

W-2 Employees & Vehicle/Mileage

W-2 employees cannot deduct unreimbursed mileage under current law — the employer must reimburse through an accountable plan
The 2026 IRS standard mileage rate is 72.5¢/mile — 30,000 miles = ~$21,750 the employer should be reimbursing
If the employer won't set up a proper accountable plan, explore reclassification to 1099/independent contractor — especially if the worker sets their own schedule and is paid per job
In the meantime, see if the vehicle can be legitimately tied to another business entity you own

Flipping Partnerships

For one-off flips with different partners, use a Qualifying Joint Venture (QJV) — no separate entity required, each partner reports their 50% on their own return
QJVs are valid for fix-and-flip (self-employment activity) but not for passive rental real estate
Everything in a QJV must split exactly 50/50 — no special allocations or waterfalls
For a consistent partner you flip with regularly, form a partnership LLC with a proper operating agreement — this allows custom splits, investor capital accounts, and a shared bank account
Invoicing a partner for project management fees generates ordinary income; structure each deal intentionally based on your role and the hold timeline
Avoid buying flips in one partner's entity and invoicing the other for PM services — it creates tax and liability mismatches

Real Estate Professional Status (REPS)

A high-earning W-2 spouse paired with a spouse who qualifies as a real estate professional is one of the most effective tax setups available
REPS requires 750+ hours in real estate activities and more hours in real estate than any other profession
Once REPS is established, passive rental losses (including large depreciation deductions) can offset ordinary W-2 income
Track hours and miles meticulously throughout the year — not just at tax time

ADUs & Property Optimization

ADUs (Accessory Dwelling Units) — converted garages, backyard cottages, basement apartments — can add rental income and new deductible expenses
A property with an extra lot may be eligible for a new ADU depending on local zoning — worth checking with the city
ADU rental income opens the door to home office deductions and other property-related write-offs

Bookkeeping & Records

Good books are what make every other tax strategy actually work — especially if audited
Tools mentioned: REI Hub (via TurboTenant), Stessa, TurboTenant
Track all hours for REPS, miles for any vehicle used in the business, and reconcile transactions monthly — don't wait until tax season

Mindset

Tax strategy is a long game, not a single transaction. The decisions that compound the most — holding rather than selling, structuring partnerships correctly before a deal closes, getting withholding right now instead of at filing — are the ones made proactively. Good books and meticulous records aren't bureaucracy; they're what make every other strategy actually work when it's tested. Build the systems before you need them.

Thank you all for joining!

0 comments

Friday Weekly Q&A Call - 06/26/2026