Depreciation strategy for coastal rental owners, cost seg, bonus depreciation, and energy-credit stacking.
Your carrier just non-renewed your coastal rental. Here's the 60-day triage workflow, FAIR Plan mechanics, and surplus-lines ladder to keep your property insured.
IRS examination of REPS claims focuses on contemporaneous time logs, material participation proof, and spouse election consistency. Coastal investors face heightened scrutiny.
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.
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.