The capital and tax layer of a coastal portfolio: cost segregation, 1031 exchanges, Real Estate Professional Status, passive-loss thresholds, and energy credits — the strategies that turn a $3M oceanfront SFR from a tax-drag into a wealth-compounding instrument. Written for high-W-2-income owners and their CPAs.
4 articles in this category.
Coastal rental losses are passive by default. Under $100K AGI you can deduct $25K against W-2 income; from $100K–$150K it phases out; above $150K, all losses suspend. Here is the playbook for each tier.
IRS energy credits 45L, 179D, and 48E are sunsetting in 2026 and 2027. Coastal rental owners who place qualifying improvements in service before the deadlines unlock thousands per door — after that, the deductions vanish.
Cost segregation studies reclassify 20–40% of a coastal SFR's basis into 5- and 15-year property, unlocking immediate bonus depreciation and dramatically improving after-tax cash flow.
Master the 1031 exchange process for coastal California real estate. Learn identification rules, DST options, and how to defer capital gains while upgrading to premium beach markets.