A lot of investors and even CPAs are not aware of cost segregation and how it can help them with their investments. In today’s episode, Erik Oliver will educate us on how we can take advantage of it. Erik has been with the Cost Segregation Authority for 5 years helping real estate investors save millions of tax dollars.
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Erik will discuss in detail which asset class can benefit much from cost segregation and how it works. He will also talk about the effect of tax changes that are going to take place and how you can use cost segregation to manage your tax brackets to save significantly.
Key Points From This Episode:
- Cost segregation is accelerating your depreciation deductions.
- How much is a good candidate for cost segregation?
- For Erik, three things have made a huge impact on driving down the cost of the segregation study itself: education, bonus depreciation, and technology.
- How do you select a good cost segregation provider?
- In which type of asset classes would cost segregation be the most or least efficient?
- Doing a cost segregation study allows you to allocate the sales price of your property correctly.
- How is the new administration going to affect your tax rates and capital gains if you were to sell your properties?
- Cost segregation on some of your assets could allow you to lower your taxable income so you could offset those gains.
- Cost segregation could get you out of some tax scenarios in our current administration and help you manage your tax brackets to save significant tax dollars.
“If you don’t do cost segregation, what ends up happening is, let’s say I buy a property for a million and I sell it five years later for 2 million. You’re telling the IRS that everything in that building – the land, the walls, the dirty old carpet – everything doubled in value. You’re saying your dirty old carpet is worth double today versus what you bought it four or five years ago, and that’s just not the case. Your personal property depreciates. It goes down in value. It doesn’t appreciate. And so, by doing a cost segregation study, it allows you to allocate the sales price to the right buckets, for lack of a better word…” [0:14:40.0]
“It’s amazing how much money people pay in taxes where they don’t have to because they have a CPA who maybe is not necessarily well-versed on real estate or doesn’t understand the real estate law and how you could play these different pieces together to save tax dollars. So, get yourself a good real estate CPA, good cost segregation provider who works hand-in-hand with your CPA so that you can reduce your tax liability.” [0:20:21.0]
Links Mentioned in Today’s Episode:
About Erik Oliver
Erik Oliver has been with the Cost Segregation Authority for 5 years helping real estate investors save millions of tax dollars. Erik speaks often at local, regional, and national events on cost segregation and other tax-saving strategies. He brings with him a passion for identifying cost savings and educating commercial real estate owners on the benefits of cost segregation.
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