Cost segregation years after

[Alex U.]

IF a property has been purchased a couple of years ago, and a regular depreciation was taken for 1 yeaer, ( ie. 27.5 year depreciation), in year 2, can you do a cost segragation, and take the bonus depreciation in the 2nd year?

[Randy Rodenhouse]

I wanted to mention that The Cares Act (passed during COVID) made it so you can carry the passive losses from depreciation back five years to income made in 2015 onward. That means if you had a lot of real estate gains in 2017, bought a property this year, and took a big loss through bonus depreciation, you can go back and amend your 2015 returns and get a tax refund for the taxes you paid back then.

Also, in The Cares Act, you can use the new depreciation guidelines to catch up on assets purchased in the last three years. Meaning if you purchased a property back in 2017 and didn’t do a cost seg study and accelerate depreciation, you can go back and do that and amend your returns. And you can carry these losses forward into eternity to offset future earnings if losses are remaining after you've wiped out all of your income.

Make sure to consult your CPA on these issues. This is not tax advice.