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Tax, SDIRAs & Cost Segregation

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John Acheson
  • Renter
  • Las Vegas, NV
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How to get a $100K tax deduction on $300K investment?

John Acheson
  • Renter
  • Las Vegas, NV
Posted Feb 7 2024, 21:41

Assuming cost segging a rental is the only way:

condo or townhome/SFH with NON depreciable land

newer property/fixtures vs older property

NOT a pro newbie landlord vs REP

self manage or prop. mgmt. co.

GOAL is biggest tax bene.
NOT best cash flowing deal

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Zachary Jensen
Tax & Financial Services
#4 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • San Diego, CA
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Zachary Jensen
Tax & Financial Services
#4 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • San Diego, CA
Replied Feb 8 2024, 07:00

Hey @John Acheson

Dont let the tax tail wag the income dog! We first want to make sure we are getting a proper deal before we start thinking about tax benefits. Generally cost segregation can wipe out anywhere from 15-30% of the purchase price in taxable income, however, this varies greatly on a deal-to-deal basis. 

You need to qualify for real estate professional status or use the short term rental loophole for any of this to matter though. I would first look into which one of those you are and then decide the strategy moving forward. 

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Julio Gonzalez
Pro Member
#4 New Member Introductions Contributor
  • Specialist
  • West Palm Beach, FL
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Julio Gonzalez
Pro Member
#4 New Member Introductions Contributor
  • Specialist
  • West Palm Beach, FL
Replied Feb 13 2024, 05:12

@John Acheson While I am a big proponent of utilizing cost segregation studies, I also agree with Zachary about not letting the tax tail wag the dog. The investment first needs to be sound and the tax benefit is the cherry on top. Ask yourself "Would I still buy this property if cost segregation wasn't an option?"

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