The Real Cost of a California Rental LLC
Form 568, the $800 minimum tax, charging-order protection, and the practical owner-economics for coastal California rental LLCs in 2026.
Cost segregation studies, engineering allocations, and bonus depreciation strategy for coastal rental owners.
Form 568, the $800 minimum tax, charging-order protection, and the practical owner-economics for coastal California rental LLCs in 2026.
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.
REPS lets coastal rental owners deduct unlimited rental losses against W-2 or business income. Here is the 750-hour test, the more-than-half-time test, and the documentation the IRS actually wants to see.
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.