I often get asked how the most successful real estate investors take advantage of existing tax laws. The answer is that they do cost segregation.
First, I’ll tell you what it does. Then I’ll tell you what it is.
Cost segregation can reduce your tax burden upfront significantly, especially if you are investing in multifamily syndications and new construction projects.
The reason cost segregation can help you so much is because you can depreciate segments of your property on a highly-accelerated timeline.
Normally, you can depreciate the value of real estate over the course of 27.5 years (depending on property type), in a “straight line depreciation” method. However, with cost segmenting, you can depreciate some segments of your real estate over 5 years, sometimes even over the first year.
Watch this video to learn more about cost segregation. If you want to know more, call me at (925) 852-8261 and I will introduce you to my advisory team.