Cost Segregation Helps Real Estate Investors

[Julio Gonzalez]

A cost segregation study is an engineering study that allows you to depreciate a significant amount of your real estate purchase price up front by breaking down the building into structural components which are expensed over a 27.5 to 40.0 year method depending on property type and the study also determines the non-structural components of a building that can be immediately expensed under our current federal tax code. These engineering surveys are a tremendous tool to maximize accelerated depreciation of your building investment to preserve wealth!

[Yonah Weiss]

Originally posted by @Jen Hunt:

If I buy a 1.4m 4plex and intend to keep the building indefinitely, is there any benefit to a cost seg study? I don't think so, if the math works out the same over time.. in fact, since I have little passive income on the front end it seems I would benefit more by depreciating over the 27.5 years. Thoughts?

The method can help, especially if you are a real estate professional, and can use the extra depreciation to offset non-passive income as well. It also is a great strategy if this is not the only property you intend to buy over the next 27.5 years, since you can use the depreciation from one property to offset income from others as well.

You asked "is there any benefit", the answer is it depends on your circumstances, but certainly it can be beneficial. It's best to speak with an expert and/or your CPA to see if it's best for your overall strategy.