Experienced real estate investors use cost segregation to keep more of their returns. In this episode, Tom Brodie, National Account Executive with CSSI – Cost Segregation Services, explains how it works from start to finish.
What Cost Segregation Does
Instead of depreciating a property as one asset over 27.5 or 39 years, a cost segregation study breaks it into components and reclassifies qualifying ones into 5, 7 and 15-year schedules. The result is larger deductions in the early years of ownership, when cash flow matters most.
How the Process Works
- Free estimate. Tom reviews your property details and estimates the potential tax benefit.
- Engineering study. CSSI’s engineering team analyzes the property and identifies qualifying components.
- Detailed report. You receive an IRS-defensible report documenting the reclassified assets.
- Your CPA applies it. The results go into your tax return, including catch-up depreciation for properties bought in prior years.
Properties That Benefit
Multifamily, retail centers, office buildings, warehouses, self-storage, hospitality and residential rental portfolios worth $200,000 or more are all good candidates.
Example result: an auto dealership purchased in October 2019 for $5,096,000 (less land) produced a first-year tax savings benefit of $617,220. Results vary by property.
See What Your Building Could Save
Tom will run a free, no-obligation estimate on your property, so you’ll know what’s possible before you commit to anything.
Prefer to talk now? Call Tom at 713-906-3710.
I’m a two time Texas A&M graduate (BBA: 1981 & MBA: 2001) who worked for Shell Oil Company for 26 years. I learned the importance of communications – both verbal and written, as well as problem solving skills. With experience ranging from finding intra-company billing errors to defining customer requirements in global budgeting software to teaching people how to scuba dive and take pictures underwater. Tom Brodie Bio
