How to find a company for cost segregation study?

Question

Hi, newbie question here.

I want to have a cost segregation study done this year on a STR I purchased in Missouri last month. It is currently in service, came fully furnished, and I will renovate in January.

I did a search on cost seg companies thinking I'd find one local to Branson, MO. I did not, or did not know what to look for.

Any advice on how to find and select a company, do they have to be local? How long does a study take, I've seen a 6 week estimate online? Can the study start in 2022, but not be completed to be counted in 2022?

Michael Plaks · Answer

@Whitney Griffith

Does not need to be local, however a local one can be quicker and maybe cheaper since travel is not involved. Two resident experts that own cost seg companies and work nationwide are @Yonah Weiss and @Julio Gonzalez.

Whether or not it is helpful in your specific situation and if yes, whether it is cost-efficient is a different question, best addressed by your accountant. For some clients we recommend doing it, and for others we don't. A lot of factors need to be considered.

If you plan to apply cost segregation to your 2022 tax return, you need to complete it by the time you do your taxes next year. No need to start it by the end of this year, unless you need the extra deduction for the cost of the study.

Eliott Elias · Answer

Try Madison Specs

Alex Olson · Answer

I recommend speaking to @Yonah Weiss He is the best I know at cost segregation. A great person, too!

Julio Gonzalez · Answer

Thanks for the mention @Michael Plaks !

@Whitney Griffith I'm more than happy to pull together a free cost/benefit analysis quote to help give you an idea of how much the study would cost and what your potential tax benefits are. It's great you are looking into getting a study prior to the renovations. I typically recommend doing the study beforehand. There are a lot of factors to determine whether your property/situation is a good fit for a cost segregation study. Happy to discuss that more in depth as well.

Whitney Griffith · Answer

Thanks everyone.

@Julio Gonzalez I will reach out to you.

Justin Winn · Answer

I’m not the expert on this, but I typically here people talk about this when they have multiple properties they are updating. I’m going to give this one a listen and continue to monitor this thread. Best of luck and I hope more people come along with more good info.

Nathan Murith · Answer

@Whitney Griffith, One Rental at a Time has great content on this and has a recurring guest whose expertise is cost segregation and depreciation. This video is super helpful as well as has all the contact information for their firm: video

Basit Siddiqi · Answer

To answer your questionsdo they have to be local? No, they do not need to be local. Cost segregation/bonus depreciation is a federal concept. Any firm that specializes in cost segregation can perform the study.

How long does a study take, I've seen a 6 week estimate online? DIY - One dayOther Studies - Depends on the year, January to April, they have a delay. Other times, its faster

Can the study start in 2022, but not be completed to be counted in 2022?Must be completed by the filing of your 2022 return(Extended return, up until October 15)

How to find a company for cost segregation study?

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