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Does Cost Segregation Make Sense with Low W-2 Income?
I purchased a short-term rental this year and I am self-managing, so I qualify for active participation based on the 500 hour requirement. I am considering doing a cost segregation study, but after looking at all the costs, I think it may not be worth it. Could you please help me with the math:
Purchase price: $835,000
Land value: approximately $125,000
Proposed $141,000 in bonus depreciation in 2022
2022 - 2027 accelerated tax depreciation of $200,000
AGI: $105,000 last year
Federal tax paid: approximately $9,300. That puts me into 24% Federal tax bracket married filing jointly.
Fee for cost segregation: $3,000
CPA fee EVERY YEAR: $1,900. Right now I'm doing my own taxes with TurboTax and happy with the result so far.
The plan for the property is to hold forever.
Thank you for your help!