This will be taxed as your ordinary rate and be subject to self-employment tax. 

For example, an appliance costs $2000, if it is depreciated together with the building at 27.5 year, then the depreciation recapture will be  " Section 1250 Gain", taxed at maximum of 25%.However, if it is depreciated separately as personal property,  though the deprecation recapture will be " Section 1245 Gain" and be treated as ordinary income,  but because personal property like appliance will only have minimal value when we sell it, let say it worth $100,  so we only need to recapture the $100 as ordinary income, the other $1900 is effectively converted to long term capital gain.So I think one benefit of the cost segregation is that it can convert " Section 1250 Gain" to long term capital gain, which is still a big benefit.Am I right? 

Quote from @Sean McKee: Ordinary wear-and-tear on a 1bed apartment shouldn't be more than $200 per year, and that's being generous.I manage around 150 class-C rentals and over 80% of my renters get their full deposit back.

Hi all,I've been reading about the Passive Activity rules that prevent passive losses (eg Depreciation) from being offset against ordinary income.

You're talking about a renovation which is probably not part of ordinary property management services and therefore not limited to the same restrictions.It sounds like you need to communicate with your manager better.

@Collin S.An expense needs to be ordinary and necessary in the line of business you are in for it to be deductible.Cleaning is an ordinary and necessary expense for the short-term rental business.

Converting to a Roth shouldn't create a penalty as it's still a conversion but the money has to stay in the Roth IRA and it is taxed as ordinary income.

That means full ordinary income deductibility for the realtor costs against a slightly higher deferred capital gain down the road.

flip profits are taxed as ordinary income

It is true that we were able to recognize this profit by offsetting ordinary income from other personal sources... this benefit would not have been available without it, and may not be available in the future, but it was certainly there for us in ‘18.