Is the IRS Secretly Funding Your Vacation Home Upgrades?

Could the IRS Be Bankrolling Your Dream Deck and Pool?

Hi there,

Before we dive into today's tax-savvy tips, a huge thank you to each of you—our community has officially crossed 15,000 subscribers, and it's all thanks to your enthusiasm for smarter co-ownership!

Last time, we dove into the game-changing tax law revival of 100% bonus depreciation for 2025 and beyond. If you missed it, the big news is that co-owners can now fast-track deductions on vacation home assets like never before. But let's get real: what does this actually mean for your wallet, your weekends, and that envy-inducing backyard oasis?

Today, we're checking out how this rule isn't just a boring tax tweak—it's a clever hack for making co-ownership even smarter. Imagine Uncle Sam chipping in for the luxuries that make your shared escape unforgettable. Intrigued?

Bonus Depreciation: Your Fast Pass to Tax Savings (No Lines, No Waiting)

Forget the slow drip of traditional depreciation over decades. With 100% bonus depreciation back in play, co-owners in an LLC can deduct the full cost of qualifying improvements right away—if the property qualifies as an investment or rental.

What’s on the menu for instant write-offs?

• Cozy furniture and decor that turns a "house" into a "home" 🛋️

• Essential appliances for those group cookouts 🔌

• Climate control upgrades like HVAC for year-round comfort ❄️🔥

• Outdoor perks: decks, pools, landscaping, and yes, that hot tub 🏊‍♂️

The key? These items must fall under 5-, 7-, or 15-year recovery periods, and your setup needs to be LLC-structured with proper tracking.

Picture This: A Beach House Scenario That Pays You Back

Building on our last chat, let's crank up the numbers. You and seven friends or family snag a $1.5 million coastal gem (hey, dream big in 2025).

• Total upgrades (furniture, pool, deck): $100,000

• Your 1/8th share: $12,500

• Tax bracket: 37% (welcome to success)

Boom—deduct the full $12,500 this year, slashing your tax bill by about $4,625. That's enough for premium beach gear, a weekend getaway, or even seeding your next co-ownership adventure. And remember, this stacks with the overall tax perks we covered before, amplifying your returns.

The Fine Print: Don't Trip Over These Hurdles

This magic only works if:

• Ownership is via a proper LLC (as we talked about in our LLC deep-dive newsletter)

• The home's treated as a rental/investment, not purely personal

• Everything's documented meticulously—think receipts and cost breakdowns

• Property in service post-2024 (perfect timing for new co-ownership deals)

Solo-owned homes? Sorry, no dice. But for groups in an LLC using platforms like Plum, this is tailor-made.

Ready to Make the Math Work for You?

Don't just nod along—act on it:

1. Audit your potential buys: List out those depreciable assets.

2. Grab a cost segregation study for max deductions (simple ones start cheap).

3. Chat with a tax pro—I'm your co-ownership guide, not your accountant.

Want a personalized rundown? Reply to this email with your scenario (e.g., "Beach house, 6 owners, $50K upgrades"), and I'll crunch an estimate tailored to you.

Bottom line: As we talked about the tax law shift last newsletter—now it's clear why co-ownership isn't just about splitting costs and fun. Why go solo when the IRS rewards co-ownership?

Let's turn that "what if" into "we own it"!

—Doug

Disclaimer: This isn’t tax advice—I’m not a CPA or tax advisor. Every owner’s situation is different, so talk to a qualified tax pro before making decisions. If you need a real estate-savvy CPA, I’m happy to recommend one!

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