Cracking the Code on Cost Segregation Tax Savings for Passive Investors

Truly Passive Income

Neil Henderson chats with Erik Oliver, president of Cost Segregation Authority, to introduce the exciting world of cost segregation and how it can save passive real estate investors a bundle on taxes. Turn up the volume to learn how cost segregation studies work, when they make sense to pursue, plus tips and tricks for maximizing tax savings.

Timestamps

• [1:40] What is a cost segregation study and how does it work?
• [4:45] Real-life examples of cost segregation savings
• [8:30] Bonus depreciation rules explained
• [12:10] Using cost seg to offset W-2 income
• [17:30] Estimated cost and expected savings
• [23:20] Managing depreciation recapture
• [29:20] Other strategies to minimize taxes

Key Takeaways

• Cost segregation accelerates depreciation deductions by breaking out components of a property into shorter useful lives
• Studies make the most sense on larger commercial properties but can also benefit residential
• 30-35% frontloaded depreciation is typical, more with bonus rules
• Deductions can offset other passive or active income if you meet qualifications
• Expect at least 10x return for cost of study
• Must understand depreciation recapture tradeoffs over long-term

Resources

• Cost Segregation Authority Website: www.costsegauthority.com
• Erik's Email: [e-mail]

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