Depreciation is a strategy. Most owners treat it as a default.

Straight-line depreciation on everything. A cost segregation study routinely reclassifies 20–35% of a building's basis into 5- and 15-year property. Owners who skip it are lending the IRS money interest-free.

Real estate professional status left unclaimed — or claimed carelessly. The hours tests are strict, but qualifying changes how losses offset other income. It's worth doing correctly.

Hospitality payroll landmines. Tip reporting, the FICA tip credit, and service-charge classification are audit magnets that also hide real savings.

Cost segregation reclassifies components of a building — fixtures, land improvements, specialty systems — into shorter recovery periods, pulling deductions forward. On a recently purchased or renovated property the first-year benefit is frequently the largest single item on the return.

Passive loss rules decide whether you can use those losses. Real estate losses are generally passive unless you qualify as a real estate professional or the short-term rental exception applies. Documentation of hours is what carries the position, and it has to be contemporaneous — reconstructed logs rarely survive scrutiny.

1031 exchanges are timing exercises. Identification and closing deadlines are strict and unforgiving, and the qualified intermediary must be engaged before closing. Planned early, an exchange defers substantial gain; discovered late, the opportunity is simply gone.

Hospitality adds an operating layer: occupancy and transient taxes, tip reporting, seasonal labor, and revenue per available room — a business inside an asset, with two sets of numbers that both have to work.