3.75x
Leveraged Deduction
Utilizing current tax codes to your advantage.
Innovative Tax Advantaged Investments
Overview
This is an opportunity to purchase a VACAHouse and reduce your taxable income by $375,000 with an income-producing asset.
Due to its unique designation, VACAHouse qualifies for a one-year, 100% deduction as defined under the Internal Revenue Code, section 179. For tax years beginning in 2024, the maximum expense deduction is $1,220,000. (Larger amounts can be deducted under IRC 168k)
The VacaHouse
About the VACAHouse
Measuring 19 feet by 20 feet, or approximately 380 square feet, the VACAHouse is designed to provide privacy and comfort by including a full kitchen, bathroom, bedroom, dining & living area.
Constructed with a steel frame and walls, the VACAHouse is designed to endure significantly longer than conventional stick-built houses due to its reduced susceptibility to severe weather conditions, mold, rot, etc.
The VACAHouse is unique as it is movable and doesn’t require an expensive foundation. They simply sit on 12 adjustable feet on either concrete blocks or helical piers (ground screws).
FLOOR PLANS
Let's Take a Look at the Process
Purchase Details
Purchase an income-producing VACAHouse for $375,000 with $100,000 down. The remaining $275,000 will be financed, resulting in a monthly payment of $763.89.
Lease Details
Strategic partners (Signature Hospitality) lease the VACAHouse units from the purchaser for $885 per month. They cover the $763.89 monthly loan payment and return the $121.11 difference to the investor each month.
Tax Deduction
Under IRC Section 179, the owner can claim a $375,000 deduction on their 2024 taxable income, potentially yielding $138,750 in federal tax savings for those in the highest tax bracket.
Financing Terms for the SIGNATURE VACA House
Purchase Price: $375,000
Down Payment: $100,000
Note Balance: $275,000
Note Rate: 0%
Note Term: 30 Years
Monthly Note Payment: $763.89
Lease Payment to Tax Investor: $885
Section 179
In 2024, Section 179 allows businesses to write off 100% of the cost of qualifying assets in the year they are placed into service up to $1,220,000. While real estate does not qualify, IRS rulings have determined that movable structures, such as portable homes delivered on wheels and used to produce income, are considered personal property and not real estate. This classification makes VACAHouses eligible for Section 179 deductions.
Section 168(k) – Bonus Depreciation:
In 2024, businesses can deduct 68% of the asset’s cost in the first year, with the remaining 32% spread over the following four years. Movable structures like VACAHouse units, which are delivered on wheels and can be transported, are classified as personal property under Section 168(k), making them eligible for this bonus depreciation.
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Disclaimer
Signature Structured Rental Investments, LLC and its affiliates do not provide tax, legal or accounting advice. This publication is designed to provide accurate and authoritative information on the subjects covered. It is presented however, with the understanding that the publisher, editors, and authors are not engaged in rendering legal, accounting, or other professional service. If specific tax advice or other expert assistance is required, the services of a competent professional person should be sought. The information in this publication is not intended or written to be used as, and cannot be used as or considered to be written tax advice, and should not be relied on for the purpose of (1) avoiding tax-related penalties under the Internal Revenue Code or (2) promoting, marketing, or recommending to another party any transaction or tax-related matter(s) addressed herein, for IRS audit, tax dispute, or other purposes. You should consult your own tax, legal and accounting advisors before engaging in any transaction.