Cost Segregation Study for Single Family Homes

[Berry Starnes]

Actually, I'm in Portage and Kalamazoo areas:

I am hoping someone can help me figure out if a cost-seg is worth it and on which of my two recently purchased properties I should do it on.

I have a W2 income as a medical professional and my wife is not yet a real estate professional.  Hoping to move her into this role in the near future or next year.

I have purchased two properties this year:

1) 100K purchase about 6 months ago and put in 50K+ for renovations (full gut) and is worth around 190K from appraisal.  Currently looking for a tenant.

2)110K purchase recently and in process of putting in around <10K and looking to rent in next month or two.

I know this year is the last year to get 100% bonus depreciation.  I know I could only use this currently to write off my passive rental income.  My CPA states I should do it to my second property since the first property was almost a full gut job and wasn't worth much when I bought it. He states since I'm keeping alot as is in my second home it can be worth more to depreciate. Is this correct?  My thought was to do it to my 1st property where I had to put more money into the deal.  Are you getting depreciation from the value 'after repair' or the state it was in when you purchased the property?

Thanks for the clarification!

-Berry

[Michael Plaks]

@Berry Starnes

If you're a full-time W2 medical professional, and your wife does not qualify as a Real estate professional - you almost certainly won't benefit from cost segregation on properties you have not even rented yet. Your CPA, if you quoted him correctly, may not have a strong grasp of the industry.

Read this: https://www.biggerpockets.com/...