Cost segregation study

[Gabriel Litvack]

Hi, I'm a real estate investor in New York and I'm looking to do cost segregation on my properties. 

does anyone know how can I do it myself and if is there any app that walk through the steps of the cost segregation study?

thank you

[Bonnie Griffin Kaake]

@Gabriel Litvack Cost segregation studies are not DIY projects unless you like spending time with IRS auditors. ;-)  The IRS' preferred methodology for a cost seg study is engineering-based. This requires someone experienced in engineering, construction and accounting. It also requires an on-site property review inside and outside by a professional. The difference in cost between a rule-of-thumb approach or "desk-top" study is simply not worth the risk and rarely gets you the same amount of tax benefits. 

[Bonnie Griffin Kaake]

@Gabriel Litvack Cost segregation studies are not DIY projects unless you like spending time with IRS auditors. ;-)  The IRS' preferred methodology for a cost seg study is engineering-based. This requires someone experienced in engineering, construction and accounting. It also requires an on-site property review inside and outside by a professional. The difference in cost between a rule-of-thumb approach or "desk-top" study is simply not worth the risk and rarely gets you the same amount of tax benefits. 

[Alex Pelletier]

Quote from @Gabriel Litvack:

Hi, I'm a real estate investor in New York and I'm looking to do cost segregation on my properties. 

does anyone know how can I do it myself and if is there any app that walk through the steps of the cost segregation study?

thank you

 Some tools allow you to do a Cost Seg study using a DIY tool if your property has a low enough cost basis. Anything over $500,000 would benefit from a full study, but I'd recommend you consult your CPA and check out a couple of options. Two providers with both full studies and DIY options are KBKG and ELB Cost Seg. Good luck!

[Julio Gonzalez]

I second what Bonnie said. I strongly recommend working with a good firm, so you're protected and can ensure it's done right. I have a post here about what to consider when looking for a cost seg firm - Cost Segregation - what to consider when looking for a firm?

Here are also some Cost Segregation FAQ to consider.

If you have any questions, don't hesitate to ask!

[Mohammed Rahman]

Hey @Gabriel Litvack - trying to do a cost segregation study through a DIY-app is not the best approach, and I don't think an app exists for something like that (could be wrong). 

As @Bonnie Griffin Kaake mentioned - best to hire a professional and if you use a CPA for your real estate needs, they will likely be able to recommend someone local to you.

[Gabriel Litvack]

Thank you for you advice!

[Gabriel Litvack]

Thank you! I'll consider hiring a professional 

[Bonnie Griffin Kaake]

Quote from @Gabriel Litvack:

Hi, I'm a real estate investor in New York and I'm looking to do cost segregation on my properties. 

does anyone know how can I do it myself and if is there any app that walk through the steps of the cost segregation study?

thank you

You may find the better cost segregation firms that have more experience and do engineering-based studies are not based in your state. Local is not always the best. Get quotes for quality engineering-based studies and decide by what they are offering you other than lowest price. Would you want to buy a car based on the lowest price? How about flying in a plane that was built by the lowest bidder? 

[Basit Siddiqi]

Cost segregation studies normally need to be done by an engineering firm.

I would recommend reaching out to your accountant to see if they have any recommendations.

Best of luck!