Thursday, July 19, 2018 by Reuben Goldbaum

cost segregation

The high cost of not using cost segregation.

Thanks to the Tax Cuts and Jobs Act passed in December of 2017, many taxpayers will enjoy lower income tax rates in 2018. While this is great news for 2018, unfortunately, the 2017 tax rates are not reduced. As such, taxpayers should think about how they can accelerate deductions to 2017.

If you have not filed a tax return yet and you own real estate, one of the best ways to accelerate deductions is to undertake a cost segregation study that will accelerate your depreciation.

These studies can be very beneficial, but need to be started as soon as possible to realize the tax benefits for the 2017 tax year.

Here are 4 benefits of a cost segregation study:


1. Accelerated depreciation at a higher tax rate. At the highest tax rates, $1,000,000 of accelerated depreciation in 2017 is worth between $26,000-$100,000 of additional accelerated deductions over doing the study in 2018.

2. Potential to take bonus depreciation of up to 100% for property purchased after September 27, 2017. Instead of depreciating personal property over 5 years, you’ll be able to depreciate it in just one year. So in a cost segregation study that identifies $1,000,000 of personal property, all of that is potentially deductible in 2017 at the higher tax rates.

3.The more deductions you accelerate, the less taxes you pay, and the more money you’ll have left for your next big deal.

4. A dollar today is worth more than a dollar in ten years from now (otherwise known as Time Value of Money). With the strategy of cost segregation, you can accelerate your deductions to get those dollars today.


Want to save millions on your taxes? The deadline is soon approaching; contact us now so we can get you started right away. 718.252.4200 or info@riversidetacs.com