DIY Taxes with Cost Seg

[Alissa Cole]

Hi, we totally missed the boat to get a CPA to complete our STRs taxes. We only had one single family home for 3 months in 2021 so I decided to tackle myself. How do I implement the numbers I received from DIY Cost seg in my taxes? 2021 was the first year of service so I do not need to do the 3115 form. Where do I put these numbers? 

[Michael Plaks]

@Alissa Cole

Unlike some others who responded to  your question, I don't have an issue with a DIY cost segregation if by that you mean the software-based option offered by some cost segregation companies.

I do have a problem with a DIY tax return that includes cost segregation. This is not something we can teach you on a forum. I recommend that, if you want to file your own tax return, you do it without including this property at all. Then, a week after the Oct 17th deadline, get either your current CPA or someone else to prepare an amended (corrected) return that will include the property and cost segregation. 

Warning: considering that you only had this property for 3 months, it is possible that cost segregation will not reduce your taxes for 2021. It is a complex topic that you should not DIY.

Also, keep in mind that, if you do not owe the IRS for 2021, there is virtually no risk in missing the filing deadline and preparing one correct return later on, instead of the two-step process I suggested above.