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Harman CPAs and Associates PLLC

Rental Properites

Contact Us (469) 742-0283

Rental Properties & Tax Strategy: Maximize Deductions, Build Wealth

Real estate is more than just an investment. When structured correctly, it’s a tax-advantaged business.
At Harman CPAs & Associates, we work with real estate investors and landlords to maximize the tax benefits of rental property ownership - from depreciation to advanced strategies like cost segregation and the Augusta Rule.
Whether you’re new to real estate or already own a portfolio of properties, smart planning and entity structuring can help reduce your tax liability and increase your cash flow year after year.

Rental Real Estate Tax Benefits - Depreciation & Beyond

The IRS allows rental property owners to deduct the “wear and tear” of their property over time - this is known as depreciation, and it’s one of the biggest tax advantages in real estate.

Here’s how it works:
  • Residential rental properties are depreciated over 27.5 years.
  • Commercial rental properties are depreciated over 39 years.
Each year, this deduction offsets your rental income - often reducing your net taxable income significantly, or even to zero.
We also ensure clients benefit from:
  • Depreciation on capital improvements (new roofs, HVAC systems, renovations, etc.)
  • Bonus depreciation (phased out in 2025) where applicable on qualified property
  • Section 179 expensing for eligible equipment or furnishings
Entity Structuring & The Augusta Rule

Owning rental property often opens the door to business-level tax strategies, especially when properties are managed through a dedicated entity (like an LLC or S Corporation).

One of the often-missed strategies is the Augusta Rule (Section 280A(g)), which allows a business owner to rent out their personal residence to their business for up to 14 days per year and exclude the income from tax. When structured properly, this can create a significant tax deduction without taxable income on the personal side.

⇒ We include advisory packages that integrate real estate-specific strategies like the Augusta Rule into your overall tax plan.
Smart Planning for Long-Term Real Estate Investors

We help you think beyond the basics with guidance around:
  • Short-term rentals (Airbnb/VRBO) – Special tax treatments, material participation, and passive vs. non-passive income classification
  • Real estate professional status – Allows qualified taxpayers to fully deduct real estate losses
  • Cost segregation studies – Accelerates depreciation and maximizes deductions
  • Passive activity rules and loss limitations – Planning to avoid deduction limitations
  • 1031 exchanges – Deferral of capital gains tax on property sales
  • Exit and estate planning – Reduce taxes upon sale or inheritance

What You Can Expect from Us

Many CPAs treat rental properties as a passive Schedule E entry - we treat them like the powerful wealth-building business they are.

At Harman CPAs & Associates, we:
  • Review your current structure to ensure you’re not leaving money on the table
  • Recommend the right entity setup for protection and efficiency
  • Advise on deductions, reporting, and compliance throughout the year - not just at tax time
  • Help you plan for long-term ownership or eventual sale with tax-smart strategy

Ready to Maximize Your Rental Property into a Tax-Efficient Business?

Let’s get strategic. We're based in McKinney but work with clients across Texas and beyond. We're just one phone call or email away.

Call (469) 742-0283 or complete the contact form to schedule a consultation.