Cost Segregation for a Condo/Townhouse?

[Alan Fong]

I am a newbie investor/landlord and trying to understand the cost segregation aspect of owning. My understanding is this is the last year for 100% bonus depreciation (assume it relates to cost segregation?).

1) Is a cost segregation worth it for a 3BR/3BA townhouse/condo? I spent quite a lot of money on the renovation.

2) Does it make sense since I bought it 2 years ago and am renting it out now? Is it too late?

3) Any other tips/advices?

Thank you in advance

[Alan Fong]

Quote from @James Parrish:

@Alan Fong Often cost segregation studies do make sense even if the property was purchased years ago. What you should be thinking about however is if you can use losses created from a cost seg study to offset W2 or other income, referred to as non-passive income. These losses can be locked up if you're not a real estate professional (REPs). If you plan on adding more properties to your portfolio, or plan on spending more time on your real estate in the future it may make more sense to do a cost seg study down the line, so your losses aren't suspended. Remember, bonus depreciation is still 80% next year, which is still significant.

Nevertheless, most cost segregation professionals will provide you with a free analysis that shows you whether or not it's worth it. Hope this helps!

 Thanks James. I wasn't sure if it was worth the time/$ to do one. I didn't realize they do free analysis to show whether or not it's worth it. Thank you so much much!