Cost Segregation Study & 1031 Exchanges

[Millie Pendola]

Hey all! Just got a question from a client that I would love input on, as I am not a Tax Professional. 

Question: Is it beneficial to do a Cost Seg on a property if he plans on doing a 1031 on the same property later this year?

Thanks in advance! 

[Jeff Nash]

Hi Millie, I'd have to understand the entire fact pattern but if they are both being done in the same year you normally would do a 1031 exchange and then do the cost segregation study.  There are some complexities with how the cost basis is recorded (can be done 2 ways) and an election that can be made to ensure you maximize the deduction.  I'd be glad to discuss further.