All Forum Posts by: Ari Lasky

Hi Ashley, The answer is yes you CAN do a cost segregation on a residential property. As long as it is an income producing property that is being depreciated, you can do a cost segregation study.

Regarding bonus depreciation: Bonus depreciation is relevant to certain assets placed in service at certain times. A cost segregation study is necessary in order to identify which assets are eligible.

1) You only have to do a CS study prior to filling your tax return. No need to worry about it now. Close the deal then give me a call :-)

2)It depends on the scope of work you did but most likely, yes, you are leaving money on the table. You can always do a look back study to recoup that depreciation. It’s a little more complicated but message me if you would like to discuss more at length.

Looking forward

Thanks!

Looking forward to attending.  Would love to meet up with any BP members if interested. 

@Logan Fast, Most 1245 assets (Not the building) purchased after September 27, 2017, are eligible for bonus depreciation. Depending on your situation, and when you purchased the property, it could be worth doing a cost segregation study to maximize the bonus depreciation allowable. Feel free to PM me to discuss your personal situation.

Income from the K1 will flow through to your personal tax return and you will get taxed at your ordinary income rate. 

Depreciation recapture for 1250 assets (the building itself) is capped at 25%

@Tony Lin, Depreciation is a non cash transaction and will NOT lower your cash flow. Cash flow and taxable income are two different things. You can have positive cash flow and still show a loss due to depreciation, especially if you take advantage of bonus depreciation using a cost segregation study. Depreciation recapture rate is dependent on the asset class, 1250 vs 1245 assets are taxed differently. 

Yona Weiss is extremely knowledgeable in cost segregation and would be more than capable of helping you with any questions you might have.

When you file the form 3115, this is an automatic change that does not require the IRS approval.

@Dave Mason there is a great real estate meet up here in Jerusalem where you can find all types of real estate professionals, primarily focused in the US markets. I have made great connections there and would be happy to add you to there email list.