Cost Segregation Company Recommendations

[Coleman Nelson]

Hey everyone. We will be closing on a 42-unit apartment complex with a $2.15M purchase price here in Cincinnati, Ohio within the next month. We are considering having a cost segregation study done to accelerate depreciation. I'm familiar with a couple companies that do them, but wanted to see if the community members have any companies that they would be willing to recommend or not recommend based on good or bad experiences they had with them.

Also, does it make a big difference if the company is local versus national?

Thanks in advance for all of your help!

[David Disraeli]

Cost segregation is still a relatively little known secret.  But all that glitters is not gold.  There are plenty of firms that can produce a study and help prepare the 3115.  The advantage appears that the acceleration of tax savings can be put to work.  However excess losses are only deductible against passive income unless you are considered by the IRS to be an "active" real estate professional.  Business owners who buy their own builder are best suited for this strategy because they can raised their own rents to use up the extra losses and lower their own taxable income.  

Recapture is still an issue as will any depreciation and at higher rates than long term capital gains.  I like the idea but one must weigh their options carefully with competent tax counsel.  The firm who seems to have the largest footprint nationwide is CSSI