Cost Segregation Study

[Jeff Greenberg]

Has anyone done a cost segregation study, and what are the pros and cons?  Has anyone used Engineered Tax Services for this study?  It all looks good on paper, but I wanted to see if anyone has some real world experience with this.  @Brian Adams@Brian Burke @Todd Dexheimer @David Thompson @Amanda Han

Key words:Cost segregation, taxes, depreciation, accelerated depreciation

[Bruce Petersen]

I do it on every property.

Pro is you get tons of added write-off $$ on a declining basis.  First year is always a big one.

Con is recapture on sale.

We don't accept retirement funds so no issue with that. Even if IRA investors see no benefit everyone else does and it's pretty big. If you are a buy and hold investor you will often get profitable enough to outstrip the depreciation expense either way.

Every one of your investors will likely have a different personal tax situation so I wouldn't put too much weight into a specific class of investor.  The vast majority will benefit so we always do it and for any investors that are RE Pros they can apply an unlimited amount of loss against their 1040's.