Another Successful Tax Season Completed

Now that another tax season has ended, I just want to take a moment to say how incredibly proud I am of our team.

Once again, we completed every tax return for every one of our clients on time. Our team worked hard, stayed organized, and continued to deliver the level of service and attention to detail that our clients deserve.

Tax season is never easy, but I am grateful to work alongside a team that truly cares about helping our clients save money, avoid mistakes, and make smart financial decisions.

Over the past few months, we were able to help several clients save substantial amounts in taxes.

One client had sold a primary residence in November 2025 that had originally been purchased in the 1960s for approximately $50,000. The husband survived, but his wife had passed away years earlier. By carefully reviewing the history of the property, we were able to adjust the basis to reflect the partial step-up that occurred after her passing. We also added the cost of many years of capital improvements, as well as the selling costs from the transaction.

Because the client had continued to live in the home as a primary residence, he was also able to take advantage of the home sale exclusion ($250K). Without proper planning, the client could have owed roughly $350,000 in combined federal and state taxes. Instead, we reduced the total tax bill to approximately $35,000, saving the client more than $300,000.

We also helped another client who purchased a short-term rental property in the Midwest in late 2025 for approximately $450,000 and completed approximately $50,000 of improvements. The client managed the property personally throughout 2025 while also earning approximately $200,000 from a W-2 job.

We carefully reviewed the client’s logbook and analyzed all of the hours spent managing the property, including guest communication, coordinating cleaners and contractors, handling bookings, reviewing expenses, purchasing supplies, and overseeing repairs and maintenance. We also carefully evaluated which hours qualified under the short-term rental rules and which hours did not.

At the end of the process, we determined that the client had spent more than 500 qualifying hours managing the property during the year, which easily exceeded the required threshold.

Because the client materially participated in the short-term rental activity, the losses were treated as non-passive rather than passive. Normally, rental losses can only offset other passive income. However, since the client qualified under the short-term rental rules, we were able to use those losses to reduce the client’s W-2 income.

We also performed a cost segregation analysis, which breaks certain parts of the property into shorter-life components such as appliances, flooring, lighting, landscaping, and other items that can be depreciated much faster. Those shorter-life assets qualified for bonus depreciation, allowing a large portion of the depreciation to be deducted immediately rather than spread out over many years.

As a result, the client was able to claim a substantial immediate deduction, creating estimated first-year tax savings of more than $30,000.

Thank You

Thank you to all of our clients for trusting us this tax season. We appreciate the opportunity to help you protect and grow your wealth.

If you think you may be in a similar situation, or if you have questions about your tax planning, rental properties, real estate investments, or capital gains, please feel free to schedule a call with our team. We would be happy to help.