What is Cost Segregation and why should I do it for my rental property?
Cost Segregation is a commonly used strategic tax planning tool that allows building owners who have constructed, purchased, expanded or remodeled real estate to increase cash flow by accelerating depreciation deductions and deferring federal and state income taxes.
A Cost Segregation report for residential investment property dissects the purchase price of the property that would otherwise be depreciated over 27.5 years for income tax purposes.
Accelerate Depreciation Deductions: The primary goal of Cost Segregation is to identify all property-related costs that can be depreciated faster (typically over 5, 7 and 15 years).
Retirement and Partial Disposition deductions: The secondary goal of Cost Segregation is to establish the depreciable tax value for each major building component that is likely to be replaced in the future. Examples include roof, windows, doors, bathroom fixtures, HVAC, etc. When a component is replaced, taxpayers need this information to claim a “retirement loss” or “partial disposition” deduction for its remaining depreciation.
Residential Properties
Available for Residential Rental Properties up to 6 units with a depreciable tax basis of $600,000 or less (purchase price less land).
Easy to Use
A report generally takes less than 15 minutes to complete without the need to hire a 3rd party Cost Segregation engineer. Designed for CPAs, Tax Preparers, and Building Owners.
KBKG Audit Guarantee
We stand behind our reports. In the event of an IRS audit, KBKG will provide free audit support time at no additional charge for issues directly related to our report.
Backed by KBKG
A Cost Segregation report is only as good as the people standing behind its findings. KBKG employs one of the largest and most respected teams of Cost Segregation engineers in the US.
481(a) Adjustment
For properties acquired in prior years, optional 481(a) “missed deduction” calculation schedules are available for regular Federal and AMT.
$450 per Report
For properties acquired in prior years, optional 481(a) “missed deduction” calculation schedules are available for regular Federal and AMT