Sunday, April 5, 2026

If you own R.E. and you've never heard of cost segregation, I need to tell you something.


You're getting destroyed.

A friend owns four rental properties.

The total value of his properties was $2.8 million.

His depreciation deduction? Only $8,400 per year.

His CPA was utilizing standard straight-line depreciation over 27.5 years.

Here's what nobody told him…

Those properties contain components that depreciate much faster than 27.5 years.

Carpeting – 5 years
Appliances – 5 years
Landscaping – 15 years
Electrical fixtures – 15 years

A cost segregation study breaks down your property into these components and accelerates your depreciation.

We ran the numbers.

With cost segregation, his first-year depreciation was $127,000.

That's $118,600 more in deductions.

At his tax rate, that's $47,000 in immediate tax savings.

"Why didn't my CPA tell me about this?" he asked.

Because most CPAs don't think about real estate tax strategy.

They take the depreciation schedule you give them and file it.

They don't analyze your properties for optimization opportunities.

If you own real estate and aren't using cost segregation, you're leaving massive tax deductions on the table.

And here's the kicker — you can still do this for properties you've owned for years.

And if you have single-family homes and it's an asset that is generating income, you can take expenses against that income, including depreciation and even BONUS DEPRECIATION.




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