Cost Segregation Study: How to?

Question

Just settled on a duplex in the Mount Airy section of Philadelphia and was wondering how I go about getting a cost segregation study done?

Vicki X. · Answer

Agreed with @Nathan Grabau that CPAs are the best person to help you evaluate whether cost segs is beneficial for your specific case, and which providers to consider.

Here are a few names I know of: KBKG, ELB Consulting, CSSI.

Good luck!

Julio Gonzalez · Answer

@Torrian Fulton The next step is to get free cost benefit/analysis quotes from cost segregation companies. Here's a list of documentation you may need to provide during the cost segregation study process (after you've selected a company to perform the study):

https://www.biggerpockets.com/...

Bonnie Griffin Kaake · Answer

@Torrian Fulton  An estimate for cost segregation is what you need at this point. There is no cost to get one for you within a day or two. The IRS' preferred methodology for a study is engineering-based. You are unlikely to ever hear from an auditor if you get an engineering-based study. The documentation is great, gives you the best ROI that is not going to trigger the IRS'. It may cost a little more but what will an audit cost you?

Once you have the estimate, you can discuss it with your CPA/tax professional and decide how it fits your specific tax situation. It is a rare property and owner that cannot use the study to their benefit. Here are a couple reasons not to get a study done: you pay no taxes or you are going to sell the property in a year or two. Also, if the purchase price on the property was less than $200K it may not be viable.

I am here to answer any additional questions you might have. How can I help?

Jeff Nash · Answer

I have mostly relied on KBKG for assistance, but there are other reputable service providers as well. Feel free to message me if you want more information or want to debrief me on the details so I can point you in the right direction.

Torrian Fulton · Answer

Thanks

Nathan Grabau · Answer

Your CPA should either be able to do one for you, based off of a chart you fill in or your CPA should be able to recommend a firm that specializes in Cost Segs and have them visit the property to perform one!

Cost Segregation Study: How to?

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