Need Cost Segregation Company for STR in Anna Maria, FL
Hi, does anyone have a company that they can recommend to do a Cost Seg in Anna Maria, near Bradenton (between Tampa and Sarasota). I have only been able to find one company and they charge $6K, which seems pretty high for a single family home. Thanks!
I am following this- I am looking for this too for an str that’s in NWBradenton.
6k does sound high- what company was that?
Thanks,
Loyd
ELB out of Pinellas.
@Kristen Savino Just depends on price point of house. If it's more then $1 mil it could be worth if you get a deduction of 40%-50%. Any lower, probably doesn't make sense but it depends. STR's allow for deduction on active income if you self manage for 500 hours a year, so I'd say if you getting say $30k back against active income for example, $6k is more then worth it.
That being said, Madison Specs is a well known company.
Thanks for the mention @Chris Levarek. @Kristen Savino our company works nationwide, and always happy to help.
@Chris Levarek I was actually reading a blog recently that was stating that if you spend over 100 hours AND more time than anyone else in your short term rental you can use the depreciation against your w2.
That got me pretty excited since I only have one and I don’t have 500 hours to spend! It’s found in IRS Publication 925.
Also- thank you for the referral. @Yonah Weiss when is the best time to get the cost segregation done? Right after renovation but before renting it out? How long does the process take from the time you call to the time you can use the information?
Thanks!
@Loyd Tomlinson I typically recommend doing a cost segregation study prior to renovations. Here are a couple articles that you might find helpful prior to your renovation.
- Engineered Tax Services
- (561) 253-6640
- http://www.Engineeredtaxservices.com
@Julio Gonzalez thanks for directing me to those posts! I’ll read up on them
@Loyd Tomlinson of course! More than happy to help.
- Engineered Tax Services
- (561) 253-6640
- http://www.Engineeredtaxservices.com
@Loyd Tomlinson I realized I overlooked one of your questions. The end to end process for a cost segregation study takes about 6 weeks and the cost/benefit analysis quote takes around 48 hours. Let me know if you have any other questions!
- Engineered Tax Services
- (561) 253-6640
- http://www.Engineeredtaxservices.com
Quote from @Kristen Savino:
Hi, does anyone have a company that they can recommend to do a Cost Seg in Anna Maria, near Bradenton (between Tampa and Sarasota). I have only been able to find one company and they charge $6K, which seems pretty high for a single family home. Thanks!
We are national and the largest and oldest cost seg company in the country. We cover all 50 states. Get another quote before making a decision. Some single-family homes could cost you that much but it depends on the amount of work that needs to be done to get the study completed and the type of study being done. The IRS's preferred methodology is engineering-based and that is what we provide and is most defensible if you are ever audited. Also, look over the fine print in the agreements, some companies bury extra fees in the fine print. Be sure you are comparing apples with apples.
Quote from @Loyd Tomlinson:
@Chris Levarek I was actually reading a blog recently that was stating that if you spend over 100 hours AND more time than anyone else in your short term rental you can use the depreciation against your w2.
That got me pretty excited since I only have one and I don’t have 500 hours to spend! It’s found in IRS Publication 925.
Also- thank you for the referral. @Yonah Weiss when is the best time to get the cost segregation done? Right after renovation but before renting it out? How long does the process take from the time you call to the time you can use the information?
Thanks!
Loyd, The best time to do a cost seg study is when you advertise the property for rent. If it is occupied when you purchase it, do the study as soon as possible. If you are renovating before listing it for rent, you will have to wait until the property is occupied. The best scenario is to buy it with a tenant in it, do a cost seg, then do only minor repairs as needed. When that renter leaves, do any major renovations and revisit the cost seg for an update.
If you are listing it as a short-term rental and you are providing more hours than anyone else in maintaining the property (active participation), the property becomes an active investment rather than passive. This allows your income on the STR to offset the income from your W2. The STR is like a hotel and must be depreciated over 39 years so the cost segregation benefit is even greater for the STR. You do not have to be a Real Estate Professional to take advantage of this active investment classification if you provide the material participation requirement.
Cost segregation estimates take about 1-2 days and the studies only take about 4-6 weeks. If you hurry, you can still get a study done for your extended 2021 tax filing.
@Julio Gonzalez and @Bonnie Griffin Kaake I appreciate both of your responses! I may have screwed this up a little.. I bought a house hack str via a 203k in Bradenton, FL and have been renovating extensively over the past year while living in it.. i didn’t realize I was supposed to cost segregate before I started renovating or renting it out- permitting has been a nightmare so it won’t be finished for another month and I have been holding off on tax filing for exactly the reason Bonnie spoke about.. I’ve ended up spending an extra 100k on the renovation/furnishing outside of the 203k funds but I have a high w2 so I was planning on using those expenses to offset my w2 as I have spent the most time on the property out of each person involved. That’s a long winded explanation to say I may need your guidance and quotes when I get through this last section of renovations. Thank you so much for the info!
Andy deal of a few hundred K in value or more, Yonah Weiss at Madison SPECS for anywhere
Quote from @Alex Talcott:
Andy deal of a few hundred K in value or more, Yonah Weiss at Madison SPECS for anywhere
Thanks buddy! Great to see you on BP
I would look into a DIY cost segregation company as the cost may be cheaper.
Speak to your CPA for recommendations of a cost segregation company.
-
CPA
- Basit Siddiqi CPA, PLLC
- 917-280-8544
- http://www.basitsiddiqi.com
- [email protected]
@Loyd Tomlinson Of course. More than happy to help. If you have any other questions or are needing a cost/benefit analysis quote, please feel free to reach out!
- Engineered Tax Services
- (561) 253-6640
- http://www.Engineeredtaxservices.com
@Loyd Tomlinson Glad I could offer some helpful information. I am available when you need some guidance or a no-cost pre-analysis.