All Forum Posts by: Bernard Reisz

@Thelma Bal Best content on Cost Seg, bar none, is @Michael Plaks' posts on the subject. He's linked one of them, but he has many more posts on this topic and they're all worth reading. 

To make the most informed choice, get a Cost Seg feasibility analysis (free) which illustrates the expected tax deductions and then assess how those deductions impact your tax liability, based on your tax profile. (Michael's posts are a great resource for this, but still no substitute for working directly with a tax accountant that's well-versed in all the ins-and-outs of this.) 

@Monica Juarez-Gonzales Adding to prior note that @Michael Plaks has created the best resources and content, bar none, to help investors understand how to approach Cost Seg. Much of that content is posted on BP. While it's not nearly as good as talking to Michael himself, reviewing those resources will make you a vary savvy and informed consumer of Cost Seg services.

@Michael Plaks Kudos to you for creating this post and countless others that provide infinite value to the real estate investor community! They are unparalleled and I gain so much from them! Glad for the opportunity to "hang on to your coattails" and add some value, too. 

@Michael Plaks When there's uncertainty, there's an element of human nature that loves to be provided with certitude. We seem to have a strong (but faulty) bent towards following prognosticators, for better or for worse. 

@Michael Plaks Honored to be mentioned in such esteemed company!

@Monica Juarez-Gonzales Cost Seg and Solo 401k are both great tax and financial tools! "Mileage" from both of them depends on an investor's overall tax profile and tax strategy. (e.g., mitigating tax liability for passive and non-passive income). Always a good idea to include a tax accountant in your decision-making process. 

@Michael Plaks Great concept! As always, devil is in the details. We do tell clients about the shift in value over time, as the 1245 assets really do depreciate and the 1250 assets really do appreciate. However, we haven't been quantifying and illustrating it to sell cost seg studies. As you say, the concept is great and true, but the proper application in practice may not be as advertised. Kudos for highlighting this!

@Michael Plaks @Ashish Acharya @Nicholas Aiola, @Dave Foster, @David Orr, @Jason Watson, @Natalie Kolodij

Great discussions we've had and looking forward to continuing. 

This series of questions is where it all comes together: 1250, 1245, 1031, etc. and it really is such a confusing mess that even the IRS may have been misinterpreting it - which would not be a first! (Most notably, they've gotten REPS aggregation all mixed up in the past.)

Based on the regs seems that:

- 1245 ordinary income recapture applies to some forms of property that qualify as "real estate" for 1031 exchange purposes

- 1245 recapture on such "real estate" overrides 1031 deferral such that 1245 depreciation is recaptured to the extent there's a trade down in 1245 property in the exchange

@Heidi Kenefick There are many additional mitigating considerations worth discussing in conjunction a real estate tax accountant.  

@Abel Curiel Honored by the mention and kind words!

@Helene Goodworth Although my focus has shifted to real estate specific tax tools (i.e., Cost Seg, 1031 exchange, SDIRA), would say that while remote tax service can be great, there is immense value in working with an accountant that has a focus on the locales in which you operate (i.e., where you reside and where you invest). Nearly every locale has its idiosyncrasies; of course, some more so than others. As @Basit Siddiqi mentions, NYS in general and NYC specifically have more than their fair share of idiosyncrasies.

So, while it's true that your accountant can be remote, they should preferably have substantial experience in your locale.

@Connor Castillo As a CPA that focuses on Cost Segregation, a solid real estate accountant may be your first need, followed by finding a Cost Seg provider if needed and beneficial to you. (Although I'm a CPA, my focus is the Cost Seg piece, not the tax prep piece.) 

@Gene Battle The majority of reputable Cost Seg companies do studies nationwide. Depending on the nature of your property and the particular Cost Seg provider's MO, there may or may not be an actual site visit.