Cost segregation?? Pros vs cons

[Lara Stuart]

I bought a new construction SFR, smart home, energy efficient house for $520,000 last Nov 2021 and it is a LTR. I am trying to figure out if a cost seg study would be worth it or would any depreciation recapture I would have to pay down the line if I sell it. I will also speak to my CPA but her assistant is saying it may not be a good idea.

[Chris McCormack]

Be wary of CPAs who tell you the cost seg is not worth it. While there are pros and cons, it can be of great benefit when taxes are expected to be high. For example - if you're a real estate broker with a lot of income outside of rental income, cost seg can work wonders in bringing that down. However, if you're W2 and can't unlock passive losses, it may not be worth it. While your question requires more than a quick answer, that can provide you with a little more insight.