Cost Segregation Study

[Jeff Wheater]

Was wondering if anyone has done a cost segregation study on a SFH for tax purposes and bonus depreciation in Kansas City Missouri

[Julio Gonzalez]

@Jeff Wheater Determining whether to do a cost segregation study or not has a lot variables. What was the purchase price of your property? Will the documentation provided from the study hold up in an audit? Has your CPA provided you with a detailed cost/benefit analysis quote? Most cost segregation study companies provide the quote for free. If you need one, let me know and I'm more than happy to pull one together for you. Some other factors to consider - How long are you planning to hold this property? If less than two years, cost seg probably isn't a good route. Are you planning to do any renovations? If so, I always recommend getting the study done prior to rehabbing. If you paid ~$2k to get the cost seg study done, what is your ROI on that $2k? Do you have a current need for that cash flow generated from the tax savings? Could you go reinvest it in another property to build even more income? Would you have net income or net loss without the cost seg study? Are your real estate investments active or passive? Are your losses locked up against your passive income? There are a lot of factors to consider when get a cost seg study to determine if the benefits outweigh the costs. If you need any help or have any questions, feel free to reach out!

[Basit Siddiqi]

The first step

1) Determine whether a cost segregation study will help you in your situation. It doesn't help everyone.
Some situations that it will help - 
A) Will it lower your tax burden either this year or the next couple of years?

The situation you want to avoid is paying for a cost segregation study and it just increases your passive activity losses.

Best of luck!

[Bonnie Griffin Kaake]

Quote from @Jeff Wheater:

Was wondering if anyone has done a cost segregation study on a SFH for tax purposes and bonus depreciation in Kansas City Missouri

 Yes! I have one in Missouri now and have done others in the past. If you are considering whether or not it would be worthwhile for you, simply get a good engineering-based study pre-analysis/estimate. Then, sit down with your CPA/tax professional and decide how it will benefit your tax situation. These estimates are usually at no cost and give you the information you need to make good financial decisions going forward. Pay less attention to whether the company is in your own state and more attention to how many studies they have done, are they engineering-based studies and will they be there if you are ever audited. And, ask how long they have been in business. I/CSSI provides studies in all 50 states. 

[Lee Ripma]

@Jeff Wheater

This is not legal advice, just what I personally do. I always do algorithm based cost segregation studies - even on small properties. These usually cost me $600-$1200 depending on the property size and I benefit from the passive losses. Feel free to reach out for the companies I recommend. 

[Anne Donohue]

Hi, I want to do an algorithm based cost segregation study on a SFH in Dover, ID that is a LTR. Do I need to find a local company to do it or can you recommend a national company to do a simple, cheap cost seg study for me?
thanks,

Anne Donohue

[Julio Gonzalez]

@Anne Donohue Multiple cost segregation companies have offices and clients nationwide, so no need to find someone local unless that's your preference.

[Isaac Weinberger]

We’ve worked plenty in Kansas! Definitely worth looking at. I’d love to help.