If you’re a high earner, a cost segregation study is an incredible tax strategy that can help you save thousands on taxes. But cost segregations can be pretty confusing and overwhelming if you’re not familiar with how they work.
On this episode of Investing in Real Estate, I’m joined by Josh—the cost segregation analysis expert on our team. Josh is answering cost segregation questions from our Financial Freedom Academy community. You’re going to learn the basics of cost segregation, who a cost segregation analysis is for, and more of the finer details on how to lower your taxes.
On this episode you’ll learn:
- The definition of a cost segregation study.
- Who can benefit from a cost segregation analysis.
- The power of cost segregation on a new construction rental property.
- How to find out if a cost segregation is right for you.
- And much more!
The Definition of a Cost Segregation Study
In a cost segregation analysis, a CPA or cost segregation engineer reclassifies different components of a rental property into different tax classifications. Instead of depreciating the entire property over 27.5 years, a cost segregation study allows different components to be depreciated on a schedule of 5, 7, or 15 years. This accelerated depreciation schedule can save thousands of dollars in taxes.
Who Can Benefit From a Cost Segregation Analysis
This is determined on a case-by-case basis, but generally speaking, high net worth individuals are a good fit for our cost segregation program. In order to move forward with a cost segregation, the individual (or someone in his or her family) must qualify as a real estate professional.
The Power of Cost Segregation on a New Construction Rental Property
Because everything is brand new on a new construction rental property, every single component can be depreciated to its fullest. For a breakdown on items included in our new construction cost segregations, read this blog post, The Power of a New Construction Cost Segregation Study.
How to Find Out If a Cost Segregation Study Is Right For You
We’d love to help you determine if this tax strategy is a fit with your overall goals. You can book a free call with Josh and the team at morrisinvest.com. If for some reason a cost segregation is not right for you right now, that doesn’t mean you won’t be able to utilize it in the future. As always, it’s smart to be informed on multiple strategies so that you can build wealth your way.
Episode Resources
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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