Potential Tax
Advantages
Lago Lomita's hybrid nature — part residence, part income-producing business — creates a constellation of potential tax benefits that are uncommon in purely residential or purely commercial real estate. Each item below is a consideration to confirm with advisors, not advice.
The Short-Term Rental Advantage
≤7-day average stays + material participation can make rental losses non-passive — offsetting ordinary income without real-estate-professional status.
Cost Segregation & Bonus Depreciation
Reclassify components into 5/7/15-year property eligible for bonus depreciation (100% under current 2025 law — confirm by placed-in-service date).
Working Vineyard & Farm Treatment
California Williamson Act may assess ag land at use-value (lower property tax); vines & trellis are depreciable farm assets.
§1031 Like-Kind Exchange
The income portion may be acquired through or disposed of in a 1031 exchange; the residence portion does not qualify.
Entity, QBI & Estate Planning
LLC structuring, potential 20% §199A QBI deduction, valuation discounts on gifted interests, stepped-up basis at death.
The Residence
§121 primary-residence gain exclusion may apply to the dwelling portion; business-use taxes/interest deductible outside SALT.
Estimate Your Advantage
A short-term rental paired with cost segregation and bonus depreciation can convert a large share of the purchase into a first-year deduction — and, when the rental is non-passive, that deduction may offset ordinary income. Adjust the assumptions below to see an illustrative range.
Already a Short-Term Rental
The treehouse and guest units operate as short-term rentals today, so the ≤7-day average-stay profile and material-participation strategy are available from day one — no change of use required.
A Working Farm
The producing vineyard brings agricultural treatment: California Williamson Act use-value assessment may lower property tax, and vines and trellising are depreciable farm assets.
Mixed-Use by Design
Residence, rental, farm, and events on one title allow a reasonable allocation of basis — and let a buyer pair owner-occupancy benefits with business deductions.
Built for a 1031 Landing
The income-producing portion is investment property — a natural target for a §1031 exchange deferring gains from another asset into Lago Lomita.
$—
- Depreciable improvements$—
- Reclassified to short-life property$—
- First-year bonus deduction$—
- Status—
- Effective Year-1 net cost (illustrative)$—
Illustrative estimate only — not tax advice and not a projection of your results. Figures depend entirely on your purchase allocation, a qualified cost-segregation study, your income and material participation, and current federal and California law. Bonus-depreciation percentages and rules change and must be confirmed for your placed-in-service date. Accelerated depreciation reduces basis and is generally recaptured on a taxable sale (though a §1031 exchange can defer it and a step-up at death can eliminate it for heirs). Land is not depreciable. The short-term-rental treatment requires qualifying average stays and material participation. Consult your own CPA and tax attorney before relying on any figure shown here. Prepared by The Oldham Group · Compass.
Detailed Financials Available
The Buyer Dossier contains the full pro forma, cost segregation schedule, and a DCF model to support advisor analysis. Request access below.
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