The Cost Segregation Study a 58-Year-Old Landlord Just Used to Deduct $186,000 of Rental Depreciation in the First Year Quick Read – Mike, a 58-year-old high-income landlord, used a cost segregation study to claim $186,000 in depreciation deductions in his first year of…
nership. – Cost segregation reclassifies property components like appliances and flooring into 5, 7, or 15-year depreciation schedules instead of the standard 27.5 or 39 years. – The strategy suits high-bracket investors most, given that a 37% marginal rate yields $3,700 in savings per $10,000 deducted. Studies do cost up to $15,000, however. – For many real estate investors, one of the biggest tax advantages of owning a rental property is depreciation
Depreciation is a valuable strategy that lets investors gradually recover the cost of a property’s building and improvements over its usable life — operative word being “gradually.” But some investors may want to reap that tax break sooner. And if so, there’s one strategy that could do the trick. How a cost segregation study could result in near-term tax savings Recently, Mike, a 58-year-old landlord with a high income, used a cost segregation study to reduce his tax bill substantially.
The strategy allowed him to deduct $186,000 of depreciation his first year of ownership rather than spread out that deduction over time. Are You Ready To Retire, Or Years Behind? Most Americans suspect they’re behind on retirement and never find out.