Friday Weekly Q&A Call - 10/02/2026 · 🏠 Lower Taxes w/ Ryan

Friday Weekly Q&A Call - 10/02/2026

Key Takeaways:

1031 Exchange with a Price Bump

A seller with a $400K rental under a lease-purchase option was asked by the buyer to add $40K to the sale price, financed into the mortgage and returned via escrow to reduce the buyer's cash at closing.
A 1031 exchange is based on the net purchase price (after closing costs), so the bump likely isn't a federal issue on its own.
Fannie/Freddie conventional loans typically cap seller assists at about 6%, so a 10% bump could create underwriting and appraisal problems. Documents should never misrepresent the deal.
The seller was advised to check with the buyer's underwriter and their own 1031 intermediary.
The $30K non-refundable option deposit was treated as prepaid purchase price, and secured vs. unsecured likely doesn't matter. The hosts will research further in the kickoff call.

Cost Segregation and Bonus Depreciation

A cost seg can be done after acquisition by filing Form 3115, which typically costs $600 to $1,000.
One attendee was quoted $2,750 for the form, which the hosts said was by far the highest they'd seen. It likely reflected the cost seg itself.
Avoid a cost seg in a low-income year, since deductions are worth more at higher brackets.
If income is low, pair the cost seg with a Roth conversion to absorb the deduction. There's no refund this year, but it saves taxes over a lifetime.
Run a tax projection first (about 2 weeks turnaround) and submit by November 1st for year-end planning.
Referral companies mentioned were RE Cost Seg (10% discount) and CSSI.

Short-Term Rental to Long-Term Rental

Trying an STR for one year and switching to long-term if it underperforms is fine, as long as the first year meets the requirements.
Don't flip back and forth annually for tax benefit. A one-time pivot with a real business reason is defensible.

1099 and W-9 Rules

The 1099 threshold is $2,000 for 2026 (up from $600).
Under $2,000, no documentation is needed. Above it, get a W-9 before work begins.

Primary Residence Exclusion

The $250K/$500K exclusion requires living in the home 2 of the last 5 years.
Rental first, then move in: the exclusion is prorated down due to nonqualified use (example: roughly $34K instead of $500K).
Live in it first, then rent: no proration, and you can still sell within 3 years of moving out for the full exclusion.
Depreciation recapture is always carved out of the exclusion.
It's a cliff, not a phase-out: after 3+ years of renting post-move-out, the exclusion is lost.
Moving back in after renting can still qualify, with depreciation recaptured for the rental years.

Trump Accounts

Newborns can receive $1,000 through a Treasury program.
Compounding illustration over about 65 to 75 years: roughly $1.2M at 10%, $321K at 8%, and $159K at 7%.
S&P 500 index funds were cited as averaging around 10%.

Other Topics

Series LLCs: the hosts were skeptical, noting they tend to add complexity, and said it's a question for an attorney. They cautioned against relying on social media personalities.
Extended returns: a property placed in service in 2025 can still benefit from a cost seg on an extended return.

General Mindset

Don't let the tax tail wag the dog. Make business and life decisions first, then optimize taxes.
Think lifetime tax, not just this year. Roth conversions raise current income on purpose to save more long term.
Plan early. Run a tax projection before big moves, and use Q4 for planning.
Order of operations matters. Live in a property before renting it, and collect W-9s before work starts.
Stay legitimate. Have a real business reason for strategy changes, and keep lender and intermediary documents accurate.
Ask the right professionals (intermediary, underwriter, attorney, tax advisor) rather than social media gurus.
Compounding rewards patience. Small differences in return rate matter enormously over decades.

Thank you all for joining!

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Friday Weekly Q&A Call - 10/02/2026