In order to determine if your property is eligible and ensure your assets are assigned to their respective recovery periods, a cost segregation study is needed.A cost segregation study is a strategic tax planning tool that separates the assets that have a shorter useful life and can be depreciated over 5, 7 and 15 years from the residential rental property or nonresidential real property that are depreciated over 27.5 and 39 years, respectively.

comps are what determine ARV.and for a BRRRR to work you need a fairly distressed property. 

You can read about the differences here: Cost Segregation Study Approaches ExplainedLet’s first start with what the approaches:Detailed Engineering Approach from Actual Cost RecordsDetailed Engineering Cost Estimate ApproachSurvey or Letter ApproachResidual Estimation ApproachSampling or Modeling Approach"Rule of Thumb" ApproachSo which of these approaches is required by the IRS?

It's determined by the nature of your arrangement, mostly by how much you control the employee's work.

Thanks in advance:What's the best way to determine if a buyer with an offer is qualified?

Ask yourself if the IRS tried to say you were over/underpaying and they want $ from you, could you defend the lease amount?

How is the value of the lease determined for a buyout?

There are several things that come into play with determining if a property sale is capital gains or ordinary income. 

I have 6 houses and consider myself a novice.  I was thinking of selling 1 house and taking some profits, but I have become aware of the following federal taxes
1. Depreciation Recapture= 25% tax
2. Long term capita...

If purchasing new real estate as part of your reinvestment, a cost segregation study can maximize depreciation deductions, offsetting future taxable income.For effective planning, assess how the sale price is allocated between real estate, tangible assets, and goodwill, as this determines the tax treatment.