Cost Segregation of an Absolute Net STNL property

[Prithvi Sri]

I bought a restaurant building in March of this year. The building is around 10 years old. I used 1031 exchange to buy this as a replacement property - sold the original in Dec last year.

My question is, do I have any benefit from doing a cost segregation study? I am told by many that I can use accelerated or bonus depreciation by doing it so I wanted to check with the folks here what makes my property to benefit from this?

[Greg Scott]

I believe you can take bonus depreciation on any real estate.

We just completed a cost segregation study on an apartment we purchased in October.  The result was we could write off 30% of the purchase price in year 1.   Our investors are going to see a huge paper loss for their 2021 taxes.  For ever $100 invested, they will experience a $60 paper loss that may offset other taxable income, depending on their situation. 

As real estate professionals and as GPs on the project, we'll get enough losses to offset all of our income for 2021 and likely 2022 and 2023 for federal income taxes.