Standard straight-line depreciation takes place over 27.5 years for residential property and 39 years for commercial property.
A cost segregation study allows you to accelerate that depreciation, taking as much as 100% of the depreciation on your real estate in this year (instead of waiting 27.5 or 39 years).
The net result to you is receiving anywhere from $40,000 – $100,000+ in tax savings per property this year.
Not familiar with a cost segregation study? You’re not alone. Watch this interview between Remote Cost Seg co-founder Hayden Crabtree and our very own CPA and licensed general contractor Chad Brown breaking down the ins and outs of cost segregation studies: what they are, who they’re for, how they work…and the massive financial impact they can have for real estate investors like you.
Accelerated Depreciation:
Your Estimated Tax Savings (35%):
Schedule a Consult Below And We Can Tell You In 3 Minutes Or Less.
You are an active real estate investor who owns one or more investment properties.
Business Owners who own a brick and mortar location or office space.
If you own a secondary residence that you rent on AirBnB / VRBO or similar sites, you qualify.
If you or a spouse qualify as a Real Estate Professional under IRS guidelines, you qualify.
Accelerated Depreciation: $776,105
State: Arizona (AZ)
Cost Basis: $2,365,424
Type: Single-family
Accelerated Depreciation: $153,587
State: Tennessee (TN)
Cost Basis: $614,367
Type: Commercial
Accelerated Depreciation: $159,343
State: California (CA)
Cost Basis: $1,480,181
Type: Multi-family
Easier said than done. You would need to have a CPA qualified in both taxes and construction, coordinate schedules, and meet them on the property…it’s a nightmare.
With Remote Cost Seg, we’re making Cost Segregation Studies easy and available to RE investors around the country with the convenience of a simple video call (that can often be completed in less than an hour).
Yes, you can be eligible for a Cost Segregation Study even if you have a W-2 job.
Cost segregation is not limited to individuals who are full-time real estate professionals or those with self-employment income. It can be beneficial for anyone who owns property, including individuals with W-2 income.
Accelerated depreciation itself is not taxable. Depreciation is a non-cash expense, meaning it’s a way to allocate the cost of an asset over its useful life for tax purposes. Accelerated depreciation allows you to deduct a larger portion of the asset’s cost in the earlier years of its useful life.
While the depreciation deduction reduces your taxable income, it doesn’t directly result in additional taxes.
While you don’t need to file the Cost Segregation Study itself with your tax return, the results of the study can significantly impact the information you report on your tax return. The details uncovered in the Cost Segregation Study, such as reclassified asset categories and their respective depreciation schedules, should be accurately reflected in your tax filings.
When we complete your cost segregation study, we will provide a report detailing the results of the study.
You or your CPA would then use this information to update your depreciation schedules on your tax return.
