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Cost segregation stands as the most powerful tax strategy for real estate investors, allowing identification of property components that can be depreciated faster than the standard 27.5 or 39-year schedules.

• Typical cost segregation studies reclassify 25-30% of a property's value for immediate write-off through bonus depreciation
• Without cost segregation, investors typically write off only about 3% of purchase price in year one
• Two key scenarios maximize benefits: real estate professional tax status and short-term rental properties
• Non-passive losses created can offset W-2 income, business profits, or capital gains from other real estate
• Business owners who own their buildings can use cost segregation to offset business profits
• Investors can put down 10% on short-term rentals and potentially get their entire down payment back in tax savings
• Depreciation recapture means paying taxes on previous deductions when selling, making exit strategy planning important
• Cost segregation studies typically cost $3,000-$6,000 but can save tens or hundreds of thousands in taxes
• Studies can be done retroactively – not just in the first year of ownership

For a personalized opportunity report showing how cost segregation could save you money, visit https://ProsperalCPA.com/opportunityreport. To learn foundational tax planning concepts, get our free Ultimate Tax Planning Checklist at TaxPlanningChecklist.com.