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Updated 9 months ago, 03/28/2024
Cost seg study on a property after rehabbing
Having a litle trouble finding an answer to this. I purchased a 1 BR 900sqft condo in 2021 with a depreciable tax basis of ~$275k and spent most of 2021 and first half of 2022 renovating the property (new appliances, flooring, painting, furniture, bathroom renovation, new kitchen countertops, new electric heaters, insulation, fireplace/pellet stove). The property was put into service as a STR mid 2022. I Put roughly $60k into the property during the renovations (which I did mainly myself) and have the receipts for all the tools/construction materials/appliances/etc.
I qualified for STR non-passive activity in 2022. On my 2021 return I didn't make take any deductions related to the property. For my 2022 - should I be doing a cost seg study (or is that unecessary?) - and if so, should the cost seg be on the condition of the property prior to rehab or post rehab? Are there any online/virtual cost seg tools that can assist with this ? It seems like this scenario is somewhat complicated but the property is also not high enough value to warrant a full-up normal cost seg.