Real Estate Rules & Compliance
Tell the right story on your tax return. Clean books and proper classifications keep the IRS away.
We help real estate investors review and organize their rental activity so the tax return is bulletproof. That includes separating each property’s income and expenses, identifying shared costs, tracking pre-service costs, and applying the complex depreciation rules correctly.
The Fundamentals
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Property-by-Property P&L: Multi-unit properties and ADUs need separate tracking. We require rental activity to be separated by property so income, depreciation, and passive losses are tracked cleanly—crucial if you are mixing short-term and long-term units.
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Repairs vs. Improvements: Can you deduct it today, or do you have to depreciate it over 27.5 years? We classify remodels, replacements, and upgrades accurately.
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Pre-Service vs. Post-Service Expenses: Costs incurred before the property is available for rent are generally capitalized as start-up costs. Once it is placed in service, normal repairs become deductible.
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De Minimis Safe Harbor: We review expenses to capitalize on the $2,500 safe harbor rule, allowing you to instantly deduct lower-cost property items and invoices.
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Routine Maintenance Safe Harbor: Identifying recurring expenses (like HVAC servicing and painting) that can be expensed immediately under the maintenance safe harbor.
Real estate books do not need dozens of messy, miscellaneous categories. We provide bookkeeping templates and systems to simplify your workflow (like using Stessa vs. QuickBooks), drastically reducing your time spent hunting down receipts.