One investor cut their tax bill in half with this strategy…

One investor cut their tax bill in half with this strategy…

Accountant · Williamstown, NJ · Member since 2025 · 344 posts · 182 votes

I was working with an investor who had multiple rental properties. They were frustrated with how much they were paying in taxes—even though they were “doing everything right.”

Turns out, they weren’t taking advantage of cost segregation and bonus depreciation. Once we implemented it, their tax bill dropped by nearly 50%.

It made me wonder—how many investors are missing out on strategies like this simply because they’re not talked about enough?

What’s the biggest tax-saving move you’ve used in your investing journey?

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Ned CareyPro Member
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Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
1y

Normal depreciation will make most rentals have no or negative cash flow. Most people can't use the additional depreciation.

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  • Olmsted Falls, OH · Member since 2025 · 12 posts · 3 votes
    1y

    Great call out, William!

  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    1y

    Normal depreciation will make most rentals have no or negative cash flow. Most people can't use the additional depreciation.

  • William ThompsonPro Member
    OP
    Accountant · Williamstown, NJ · Member since 2025 · 344 posts · 182 votes
    1y

    You’re absolutely right that normal depreciation often reduces taxable rental income to zero or even creates a paper loss. However, before moving forward with a cost segregation study, it’s important that your tax professional carefully evaluates your unique situation. Not every investor is in a position to fully benefit from the accelerated depreciation. If the deductions can’t be used, then commissioning a cost segregation study may not be the best strategy at that time.  Let me know if I can help Ned.  Thanks, Bill

  • Rental Property Investor · Member since 2018 · 828 posts · 811 votes
    1y

    I take no issue with you starting a discussion as a means of promoting your services, but it's quite uninspiring when you get your colleague Deborah to chime in to get your thread going. At least tell Deborah to add some value to the convo next time! 

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