Entity Restructuring Across a 14-Property Portfolio
A holding company structure and depreciation strategy reduced the owner's effective tax rate significantly — while cleaning up liability exposure across a growing portfolio.
A Portfolio That Outgrew Its Structure
Michael Chen had acquired 14 rental properties over a decade, each titled individually under his personal name. The structure had never been a problem when he owned two or three properties, but at 14, it created serious liability exposure and left meaningful depreciation and entity-level tax strategy unused.
His previous CPA filed accurate returns each year but never proposed restructuring the portfolio, leaving Michael personally exposed and paying more in taxes than the structure required.
Where the Business Stood
properties titled individually
liability separation between properties
personal tax return covering everything
Harborview came to Ledger through a referral from another real estate client for a second opinion on tax strategy. The initial review found no cost segregation had ever been performed and no holding structure existed to separate liability across the portfolio.
What We Did
Mapped the Full Portfolio
We inventoried all 14 properties, their financing terms, and current depreciation schedules.
Designed a Holding Company Structure
We built a structure grouping properties under LLCs beneath a central holding entity for liability and tax efficiency.
Commissioned Cost Segregation Studies
We identified properties where cost segregation would meaningfully accelerate depreciation.
Filed the Restructuring
We executed the entity transitions and filed accordingly, coordinating with Michael's attorney on the legal side.
How We Supported the Business
What Changed
in annual tax savings
properties now under liability-separated entities
properties with completed cost segregation studies
The new holding structure and depreciation strategy reduced Michael's effective tax rate significantly while giving each property its own liability shield for the first time. He now has per-property reporting that makes it clear which assets in the portfolio are actually performing.
What Other Business Owners Can Learn
Entity structure that made sense at three properties can become a real liability and tax risk at fourteen.
Cost segregation studies often go unclaimed simply because nobody proposes them, not because they don't apply.
Restructuring a portfolio is easier the earlier it happens — complexity and cost both grow with property count.
“I'd been leaving money on the table for years without knowing it. The restructuring alone paid for itself many times over.”
Michael Chen, Owner, Harborview Property Group