Tax, SDIRAs & Cost Segregation

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Michael Mackney
  • New to Real Estate
  • Long Island
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Cost segregation study on a property from 2022

Michael Mackney
  • New to Real Estate
  • Long Island
Posted May 26 2023, 14:19

Hey everyone, I'm starting to dive deep into the tax benefits of REI and I had a question regarding a cost segregation study and accelerated depreciation.

I purchased a long term property in 2022 that has been run by a property manager this last year. Hypothetically, if in 2023, I plan on turning it into a STR with self management to meet the the material participation, how would the accelerated depreciation work?

From what I understand, you obtain the accelerated depreciation benefit based on the year the rental property went into service.

For example, if it was put into service in 2022, I would achieve 100% of the benefit even though during that year I did not start self managing, rather than 80% for 2023. 

Let me know if I am understanding this properly, thanks!! 
 

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