Taxes help build schools, hospitals, and infrastructure that you use every day if everyone avoids paying taxes then what? Only the poor man pays taxes, and the rich use everything the poor man pays for, is that good? Badman says I don't care, greed is good.
@@MrManny075 stay poor and pay more taxes. Remember when doing your taxes at the end of the year you can always pay more. Just remember this, a poor man has never given anybody a job.
@@wsmaga No one said to pay more just be honest and pay what you should, A greedy person never thinks of paying more he always tries to pay less, Remember this, a greedy rich man without the poor man, he wouldn't have a job in the first place, in fact, he wouldn't have anything
Toby, Thank you so much. I recently purchased 4 rentals and was struggling to understand the tax benefits between being passive, active, & a RE professional. IRS pub 527 didn't help. But in one sentence you made it clear. "Passive losses are only deductable from passive income." BOOM. Now I know which way to go. Thanks, Dirk
Great video. The one thing I wish everyone would stop doing is referring to this as a "loophole". It is an Incentive. The government has created incentives to encourage people to buy real estate, vehicles and other goods, and offer a tax savings if they do. This is done as a stimulus to the economy. It gives people jobs and, in the case of rental real estate, it gives people places to live that other wise wouldn't exist. It is fair and effective. Politicians refer to these incentives as loopholes as a way to vilify the use and claim people don't pay tax. Thanks again, Toby!
I live in California. Do you have anyone you could refer me to that does cost segregation? Also to establish a non profit organization? Thank you so much. I've learned so much by watching your videos.
I've been doing these reports for almost 20 years. I still don't understand why more people don't use them. Every investor with an AirBnB or VRBO or even a regular rental property should be doing these.
Would you mind sharing how much the audit risk increases if you file the cost segregation report on a Schedule C? Also, what is the correct method for determining the value of improvements? For a newly purchased property, is it correct to use the purchasing price minus the land value shown in the newest property tax bill?
@@yingwu2143 if you have a professional do it properly, the audit risk is low. None of my reports have ever been audited, but then again I'm a licensed engineer and I'm exactly the type of professional that the IRS wants to see do these things. As a P.E. and a member of ASCSP and AACE, the methods for determining values are straightforward for me, but probably a mystery for the average person. Also regarding land, the IRS doesn't like to see assessed land values as the basis for land. They'd rather see comps or a full blown appraisal. There are also a small list of closing costs that can be incorporated into the final basis.
This is a fantastic video. So much great and accurate content. Most RUclips tax videos promise something in the title and underdeliver with high level, vague content. This is quite the opposite. I’m a CPA, and you’re spot on, Cost Seg studies are rarely taken advantage of. Loved the Doctor AirBNB strategy you provided.
The problem with taxes is that they vary - State to State and country to country ... and there is a TON of nuance on all those rules and incentives. Specific advise can be tricky to give - in broad terms, which I guess is why SOME channels are so vague. This is why people specialize. A good CPA/Tax accountant can be worth their weight in gold. Fair winds!
Guys. This is no joke. Especially the part about “offsetting other W2” Wife and I opened a restaurant in 2017. Basic LLC. 2 member. Her and I. In 2019 purchased the commercial plaza that the restaurant was in, had 3 other commercial tenants. We formed a LLC for that purchase/realestate. In 2020 when my CPA did our taxes I’m like what is the depreciation expense 😅? That’s when I started learning. Fast forward to today. The restaurant is a S Corp, wife takes a reasonable comp 😅 that’s funny too… Anyways. I (we) have 40+ rentals. I say I because I’m the “real estate” professional. The losses offset my wife’s active income taxes of her (ours) restaurant. It’s a beautiful thing. I haven’t even plate with a cost seg yet.
"Writing off" carpets, furniture etc - I'm guessing that write off is possible ONLY if you have receipts for those things? You have to buy those things new? You cant do write off on used carpets or if you don't have receipts?
Something I haven’t been able to find online. I have owned (and lived in) a property for nearly 7 years. Now, we are buying a new personal property and turning the house that we’ve lived in for years into a rental property. If we were to do a cost segregation analysis, would the basis of this analysis (and subsequent depreciation) be the purchase price from 7 years ago (130,000) or the approximate value of the house now (around 240,000)?
It's whatever you paid for it originally, plus any capital you put into it. You only use the current market value when you purchase the property for the current market value.
Thanks so much for your explanation. Can we do the bonus cost seg the second year of owning the house? If not, what can we deduct on the second year ? Thanks so much
Great question, in order to assist you further, I highly recommend you request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. Visit: aba.link/84a6a3
I recommend speaking with one of our advisors for any legal advice. Here is the link to schedule a free strategy session, aba.link/tobyss. Or you may call to speak with an advisor at our toll-free line, 800-706-4741.
Hi Andy, we recommend speaking with one of our advisors. Here is the link to schedule a free strategy session, aba.link/tobyss. Or you may call to speak with an advisor at our toll-free line, 800-706-4741.
Good question! Anderson Business Advisors has a team of Attorneys and CPAs that work with the provisions of the Internal Revenue Code to ensure individuals and investors can minimize their tax burden. With evolving laws and tax code interpretation, we strive to adapt and develop new strategies for people to have the most asset protection and tax mitigation that the law provides.
Toby, what happens if I did a cost seg and I sold that property at year 3 or year 5 without any capital gains. How much tax would I have to pay back since I already used the cost seg as a tax deduction? Thanks
My gosh, the present value of the savings alone is massive, i.e. the more money I can keep today is worth more than the write-off tomorrow. I'm calling my CPA TODAY!
Thank you for an amazing video ! If one does a cost segregation after selling the property, wouldn't they just be paying more taxes on their depreciation recapture when selling ? (unless they'd be doing a 1031)
Possibly, but generally if you are talking about rental property, most of our clients will either hold on to the property long term, or 1031 exchange the property for a new one.
Great information. I have two questions. 1. Who comes up with the list of items that can be segregated? Do you have a minimum amount? Say 5,000 for an item to be segregated? 2. Who comes up with the appropriate cost and depreciation period (5,7,15 yrs). Is that the accountant? This is especially important if it is for property that was purchased years ago. Do you use the cost from when the property (eg the carpet) was purchased or from today?
Third time watching this. Forgive me if I don't use correct terminology. Can you cost seg to offset taxes owed for drawing from your IRA? Or to make contributions to a Roth IRA? Are there any different rules for a mobile home new or used, on paid off land? How many years can you roll over any excess from the cost seg? Isn't the IRS changing this code at the end of this year? I'm still seriously ruminating over all this good information! Thank you!
Honestly, if you haven't started yet then it is unlikely that a cost segregation can be fully started and finalized this year anymore, unfortunately, not without some crazy efforts and convincing evidence. That being said, generally, the cost seg will offset other income being taxed so it will depend on how the IRA was pulled. If it is income tax from it then likely yes, if it is early withdrawal or fee-related, then likely no. There aren't any different rules that I'm aware of. You can continue to roll it over until used. The IRS may change things, but that is always the case and you should plan according to the current rules.
Hi toby, Great videos and advice! I live in Wilmington NC. do you have a referral for a professional that does cost segregation here? Keep up the good work and Merry Christmas!!
Great question! Determining the depreciation period for a property built in the 1980s involves several factors, and the specific details can vary. To provide you with accurate and personalized guidance tailored to your situation, I recommend scheduling a free strategy session. Visit: aba.link/84a6a3
How do you get the amount of each such carpet. cabinets, &landscape value amount at house purchase? by estimating or by having a professional to do that?
This is so wonderful. We can do this on a sold property? Sold a few weeks ago, no more access. :(. Maybe we can just do an amendment on the year I bought it ?
I'm glad you found the information helpful! To provide personalized advice and explore the options available for your specific case, I recommend scheduling a free strategy session. Visit: aba.link/84a6a3
Thank you!! Just bought a 2nd rental property and this exercise saved me thousands with a little bit of extra work with my accountant. I had overlooked this in previous years because of the hectic crunch time in tax season. Really appreciate you making this video! I’m a subscriber!
My wife and I retired. I made great pre-retirement decisions, and we are very comfortable and own our main home And a nearby cabin on a mountain. thinking of renting it or having a "management company" handle the rental and cleaning etc...Have No Idea what to talk to an accountant or lawyer about. Im getting hammered right now on the rising income tax on my "retirement."
Cost Segregation just means writing off assets over their actual useful life versus a default of 27.5 or 39 years. So your deduction does way up in earlier years and lowers in later years. What this means in a practical sense is you pay less taxes early on and more taxes later on - it is the time value of money that makes all the difference to an investor. A dollar today is worth more than a dollar in 5 years. So cost segregation is making sure we have more "today" dollars.
If this is missed 90% of the time, then it means that it'll be challenging to find a CPA or Tax Return Preparer who can correctly do this. Should I even ask if this can be done using Turbo Tax? Great Video by the way. Thank you for this very informative video! We are contemplating on buying our first investment/rental property, so I am trying to research and talk to people who knows the nuances of this trade.
The "Economic Ninja" and "Real Estate Ninja" (YT Channels) have some advice ... though some is behind a paywall - though it is not always pricey ... I imagine this channel is selling things too - yet it is best to do your own research first - this video is a good first step. If you only have one rental property the tax savings may not amount to the hassle - though as always it depends, void where prohibited and your mileage will vary!
Great video! what about if the house has a mortgage ? can I deduct the same amount of this or just my equity? Also can I deduct the mortgage? Last question, so if I have a home, that I dont use or I lend it to a friend, can I ask him to leave the house November and write it off? or must to be the las time of the year?
Generally, this applies regardless of whether the property is financed or not. So, this applies to the full purchase price of the property, not just the equity. In addition to this depreciation, if the property is financed, you can often write off the interest being paid as well. If you are the legal owner of the home, you can use the depreciation as a loss, regardless of whether the friend stays or leaves in the property. Generally, as mentioned in this video, you may use up to $25,000 per year in the losses, or unlock all of the passive losses if you qualify as a Real Estate Professional. If you are seeking to take advantage of the short term rental real estate professional status, then yes, your friend would need to vacate the property, and you would need to self manage (if towards the end of the year).
Several minutes in and I hear you are relieved by the prospective rental not having a pool. I'm really wanting a pool, but also planned on my current home to become a rental when I move. What's the downside of having a pool in a rental? Thanks!
You mentioned this could be done on real estate you already sold. Then right at the end I believe you said “if you have access to it” can you elaborate?
Hi, thanks for the great information. Quick question, if I am a US citizen living abroad would this also be applicable to foreign properties I own? Above and beyond the typical FEIE deduction of course.
Thanks for tuning in. That's a great question, have you set up a consultation with my team? I might register for a consultation so we can provide the most accurate solution. aba.link/84a6a3
I pay $600 to cost seg a new single family that I paid around 200k for and the tax savings is about 50k so ANYTHING is worth a cost seg. On the flip side I paid $7,000 for a NNN property I paid 3M for and I got a $1,075,000 deduction. Bigger the better
My accountant is moving from California to Washington, he had mentioned being re professional to my wife years ago, but we understood she needed to be selling property herself and take courses exams and state licensing. She stopped working as nurse Rn to manage our properties. We never cost segregated and never filed as her being re pro. What a costly mistake. Please help and point me in direction of who we talk to. Thanks for great information.
@@johnbarry8185 haha John. I can just see the auditor from the IRS setting up algos waiting for investors to visit their site, then tracking their IP address to their physical address, and then issuing an automatic audit notification to the investor. They be pretty sneaky like that, no doubt! They prolly coined the term "click bait"😆
Thank you for all this info. If you can please answer this question: As an American real estate investor, does this apply if you purchase a rental in a different country? Can you still write any of that off like in this example?
Yes. When you take depreciation of any kind, including accelerated depreciation with a cost seg, you have to repay it if you later sell the property for a high enough price to recapture that depreciation. And a cost seg moves a portion of your property to a different asset class which can be taxed at a higher recapture rate (it's no longer section 1250 property). So that's one of the reasons why you wouldn't want to do a cost seg on a property that you plan to sell in the near future.
Hi Tom! Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby
Toby, this was the absolute best video to understand cost segs!! Thank you first of all! Is there anyone in Michigan that you would recommend to use as our CPA or would your firm be willing to take us on to evaluate our situation with 4 rental properties that we have purchased in the past year alone, cash flowing well on all, and have set up our Trust and holding company accordingly... Much appreciate all of your time and education!
Hi Matthew, thank you for leaving your comment. You can request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation.aba.link/tobyss
The only thing am still confused about is doing these strategies won’t affect your ability to qualify for loans if it shows as a loss if am still wanting loans to keep investing? Doing exactly this way won’t affect anything for loan qualification
![Seungmin "그렇게, 천천히, 우리(As we are)" | [Stray Kids : SKZ-PLAYER]](http://i.ytimg.com/vi/kAzmhLHePqU/mqdefault.jpg)
Claim Your FREE 45-minute consultation to receive business planning tips and asset protection. 👉 aba.link/84a6a3
ok oo
I could def use your help with my rental. Awesome information.
Taxes help build schools, hospitals, and infrastructure that you use every day if everyone avoids paying taxes then what? Only the poor man pays taxes, and the rich use everything the poor man pays for, is that good? Badman says I don't care, greed is good.
@@MrManny075 stay poor and pay more taxes. Remember when doing your taxes at the end of the year you can always pay more. Just remember this, a poor man has never given anybody a job.
@@wsmaga No one said to pay more just be honest and pay what you should, A greedy person never thinks of paying more he always tries to pay less, Remember this, a greedy rich man without the poor man, he wouldn't have a job in the first place, in fact, he wouldn't have anything
Toby,
Thank you so much. I recently purchased 4 rentals and was struggling to understand the tax benefits between being passive, active, & a RE professional. IRS pub 527 didn't help. But in one sentence you made it clear. "Passive losses are only deductable from passive income." BOOM. Now I know which way to go.
Thanks,
Dirk
Great video. The one thing I wish everyone would stop doing is referring to this as a "loophole". It is an Incentive. The government has created incentives to encourage people to buy real estate, vehicles and other goods, and offer a tax savings if they do. This is done as a stimulus to the economy. It gives people jobs and, in the case of rental real estate, it gives people places to live that other wise wouldn't exist. It is fair and effective. Politicians refer to these incentives as loopholes as a way to vilify the use and claim people don't pay tax. Thanks again, Toby!
Excellent points!
Thanks Randy. You had an elegant way of wording real estate investing.
I live in California. Do you have anyone you could refer me to that does cost segregation? Also to establish a non profit organization? Thank you so much. I've learned so much by watching your videos.
@@akemyjones4196 Check with your CPA
Very Good point
This is one of the most useful videos I've seen in RUclips
Glad you think so! Thank you so much for watching our content!
I've been doing these reports for almost 20 years. I still don't understand why more people don't use them. Every investor with an AirBnB or VRBO or even a regular rental property should be doing these.
Would you mind sharing how much the audit risk increases if you file the cost segregation report on a Schedule C? Also, what is the correct method for determining the value of improvements? For a newly purchased property, is it correct to use the purchasing price minus the land value shown in the newest property tax bill?
@@yingwu2143 if you have a professional do it properly, the audit risk is low. None of my reports have ever been audited, but then again I'm a licensed engineer and I'm exactly the type of professional that the IRS wants to see do these things. As a P.E. and a member of ASCSP and AACE, the methods for determining values are straightforward for me, but probably a mystery for the average person. Also regarding land, the IRS doesn't like to see assessed land values as the basis for land. They'd rather see comps or a full blown appraisal. There are also a small list of closing costs that can be incorporated into the final basis.
Interested in your Cost Seg referral, I'm in the DFW (Denton) area. Thank you for the excellent video(s)!!
Merry Christmas Toby. As a retiree and duplex owner since 1986, I appreciate your professional knowledge.
Thanku. As usual, you killed it!!! Appreciate your time and effort sharing such potent content 👏🏿
This is a fantastic video. So much great and accurate content. Most RUclips tax videos promise something in the title and underdeliver with high level, vague content. This is quite the opposite. I’m a CPA, and you’re spot on, Cost Seg studies are rarely taken advantage of. Loved the Doctor AirBNB strategy you provided.
Thank you, we are glad to hear you found the info informative! We appreciate your kind words.
The problem with taxes is that they vary - State to State and country to country ... and there is a TON of nuance on all those rules and incentives.
Specific advise can be tricky to give - in broad terms, which I guess is why SOME channels are so vague.
This is why people specialize. A good CPA/Tax accountant can be worth their weight in gold.
Fair winds!
Thank you so much, Tobi!
The depreciation has to be recaptured when you sell it?
Very informative. Thank you
If you owned a house for many years ( rental property ) and never did cost seg can you do the past 15 years now ?
@toby, please answer this! I’d love to hear your take and all the nuance involved. Thanks!
Guys. This is no joke. Especially the part about “offsetting other W2”
Wife and I opened a restaurant in 2017.
Basic LLC. 2 member. Her and I.
In 2019 purchased the commercial plaza that the restaurant was in, had 3 other commercial tenants.
We formed a LLC for that purchase/realestate.
In 2020 when my CPA did our taxes I’m like what is the depreciation expense 😅? That’s when I started learning.
Fast forward to today.
The restaurant is a S Corp, wife takes a reasonable comp 😅 that’s funny too…
Anyways. I (we) have 40+ rentals. I say I because I’m the “real estate” professional. The losses offset my wife’s active income taxes of her (ours) restaurant.
It’s a beautiful thing. I haven’t even plate with a cost seg yet.
Thank you for the wonderful information and teaching; your shared knowledge is much appreciated
Thank you for watching!
Hi, great video . I have a rent for 89 years already. But I didn’t do cost seg. Can you refer someone can do cost seg. Analysis in Orange County, CA?
excellent, thank you for your knowledge.
Thank you for watching our content, let us know if you have any questions!
It's about time someone gives examples, clarify more for my self.Great job!
Thank you, let us know if you have any questions!
thank you for the full explanation
You are welcome!
This info is like a master class! Such great information
"Writing off" carpets, furniture etc - I'm guessing that write off is possible ONLY if you have receipts for those things? You have to buy those things new? You cant do write off on used carpets or if you don't have receipts?
The most valuable content on RUclips, hands down.
This was valuable information!!!!! Thank you soooo much! 😉
You are so welcome! Thank you for watching our content!
Wow!, great stuff Toby, thanks for sharing
Thank you for watching the content, Efren!
Something I haven’t been able to find online. I have owned (and lived in) a property for nearly 7 years. Now, we are buying a new personal property and turning the house that we’ve lived in for years into a rental property. If we were to do a cost segregation analysis, would the basis of this analysis (and subsequent depreciation) be the purchase price from 7 years ago (130,000) or the approximate value of the house now (around 240,000)?
It's whatever you paid for it originally, plus any capital you put into it. You only use the current market value when you purchase the property for the current market value.
Excellent information. My wife and I need to do cost segregation on property we already own
Very informative , I am Canadian living in Canada
Do you recommend any one in GTA Toronto?
Thanks
Anil k
You will forever be in my prayers. Thank you so much for all you do and share
Great Video..👍🏼👍🏼👍🏼
Thanks so much for your explanation. Can we do the bonus cost seg the second year of owning the house? If not, what can we deduct on the second year ? Thanks so much
Great question, in order to assist you further, I highly recommend you request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. Visit: aba.link/84a6a3
Great video. Thanks!
Awesome presentation, Toby!
Thanks for watching us!
I was a little overwhelmed but I think I followed most of this. Got any recommendations for a tax acct in Lake County. FL?
I recommend speaking with one of our advisors for any legal advice. Here is the link to schedule a free strategy session, aba.link/tobyss. Or you may call to speak with an advisor at our toll-free line, 800-706-4741.
Loved the video. I have a few ABNB's. Can you refer a tax firm that performs cost segregation work?
Hi Andy, we recommend speaking with one of our advisors. Here is the link to schedule a free strategy session, aba.link/tobyss. Or you may call to speak with an advisor at our toll-free line, 800-706-4741.
Please send me information about segmentation of tax write off. Thanks
John Watlington
Are you interested in a free strategy session to go over the information?
Such a helpful video. Thank you! Now, how do we find these CPAs that can do this...?
Good question! Anderson Business Advisors has a team of Attorneys and CPAs that work with the provisions of the Internal Revenue Code to ensure individuals and investors can minimize their tax burden. With evolving laws and tax code interpretation, we strive to adapt and develop new strategies for people to have the most asset protection and tax mitigation that the law provides.
@@TobyMathishow can I get a consultation with your or your attorneys. Do they know the same as you do? I need to have a meeting with you guys.
Toby, what happens if I did a cost seg and I sold that property at year 3 or year 5 without any capital gains. How much tax would I have to pay back since I already used the cost seg as a tax deduction? Thanks
My gosh, the present value of the savings alone is massive, i.e. the more money I can keep today is worth more than the write-off tomorrow. I'm calling my CPA TODAY!
Thank you for an amazing video ! If one does a cost segregation after selling the property, wouldn't they just be paying more taxes on their depreciation recapture when selling ? (unless they'd be doing a 1031)
A 1031 doesn't relieve you from the clawback provisions if you do a cost segregation study and don't keep the property more than 6 or 7 years.
Possibly, but generally if you are talking about rental property, most of our clients will either hold on to the property long term, or 1031 exchange the property for a new one.
Hi, who you you have that can do the cost segregation study?
Do you have accountant recommendations for rental property in MS and CO?
Always fantastic information, thank you!!
Great information. I have two questions.
1. Who comes up with the list of items that can be segregated? Do you have a minimum amount? Say 5,000 for an item to be segregated?
2. Who comes up with the appropriate cost and depreciation period (5,7,15 yrs). Is that the accountant? This is especially important if it is for property that was purchased years ago. Do you use the cost from when the property (eg the carpet) was purchased or from today?
Hi Mr Mathis, I really like this segment. Can you refer someone who does cost segregation in Tampa Bay, FL. I really appreciate it. Thank you.
Hey, visit andersonadvisors.com/csa/ to request a FREE Cost Segregation Benefit Analysis
Thanks for the video
Wow you videos are amazing!
Third time watching this. Forgive me if I don't use correct terminology. Can you cost seg to offset taxes owed for drawing from your IRA? Or to make contributions to a Roth IRA?
Are there any different rules for a mobile home new or used, on paid off land?
How many years can you roll over any excess from the cost seg? Isn't the IRS changing this code at the end of this year?
I'm still seriously ruminating over all this good information! Thank you!
Honestly, if you haven't started yet then it is unlikely that a cost segregation can be fully started and finalized this year anymore, unfortunately, not without some crazy efforts and convincing evidence. That being said, generally, the cost seg will offset other income being taxed so it will depend on how the IRA was pulled. If it is income tax from it then likely yes, if it is early withdrawal or fee-related, then likely no. There aren't any different rules that I'm aware of. You can continue to roll it over until used. The IRS may change things, but that is always the case and you should plan according to the current rules.
@@TobyMathis thank you so very much...I'm mentally digesting this...
How does the segregation of depreciation affect capital gain when selling the rental property?
Your cost basis is lower, so cap gain would be greater
Great info! Shared with 2 people too!
Thank you!
How much will cost this study in NJ?
Thank you for your excellent video on cost segregation. Extremely interesting and enjoyable.
What if you make rental to primary
Hi toby,
Great videos and advice! I live in Wilmington NC. do you have a referral for a professional that does cost segregation here? Keep up the good work and Merry Christmas!!
Hi Toby, my name is Garnary. I really enjoyed how you teach in all your videos. How can I get in contact with you to discuss my situation?
If I buy a LTR biult in the1980s has that 27.5 year depreciation period for the strucure already expired? Thanks for the extremely informative video!
Great question! Determining the depreciation period for a property built in the 1980s involves several factors, and the specific details can vary. To provide you with accurate and personalized guidance tailored to your situation, I recommend scheduling a free strategy session. Visit: aba.link/84a6a3
Wow I'm watching this a second time... This is really damn good info!!! Thank you!
Thank you!
Thanks a million Toby.
Hey Toby, if you do an asset segregation, and end up with the IRS owing you, for several years, is there anything special that needs to be done?
Great video. Now to figure out how to implement into the portfolio!
Great to hear and good luck!
Great video! Can you recommend a cost seg professional in DFW area?
I'd recommend visiting andersonadvisors.com/csa/
How do you get the amount of each such carpet. cabinets, &landscape value amount at house purchase? by estimating or by having a professional to do that?
Don't these techniques just move deductions from the future to the present? In the long term is there any advantage?
This is so wonderful. We can do this on a sold property? Sold a few weeks ago, no more access. :(. Maybe we can just do an amendment on the year I bought it ?
I'm glad you found the information helpful! To provide personalized advice and explore the options available for your specific case, I recommend scheduling a free strategy session. Visit: aba.link/84a6a3
Thank you!! Just bought a 2nd rental property and this exercise saved me thousands with a little bit of extra work with my accountant. I had overlooked this in previous years because of the hectic crunch time in tax season. Really appreciate you making this video! I’m a subscriber!
Awesome content!
Amazing information, really clear and direct!!! Thank you
My wife and I retired. I made great pre-retirement decisions, and we are very comfortable and own our main home And a nearby cabin on a mountain. thinking of renting it or having a "management company" handle the rental and cleaning etc...Have No Idea what to talk to an accountant or lawyer about. Im getting hammered right now on the rising income tax on my "retirement."
Thanks for sharing!
Our pleasure!
Good one Toby. Thank you
Are able to use this bonus depreciation for short term rental income business?
Can you explain what happens in the years after you do the cost segregation?
Cost Segregation just means writing off assets over their actual useful life versus a default of 27.5 or 39 years. So your deduction does way up in earlier years and lowers in later years. What this means in a practical sense is you pay less taxes early on and more taxes later on - it is the time value of money that makes all the difference to an investor. A dollar today is worth more than a dollar in 5 years. So cost segregation is making sure we have more "today" dollars.
Thank you Toby!!
Again Tony Great Video, Information that Everyone of those new agents are going to hate>
87,000 of them...
If this is missed 90% of the time, then it means that it'll be challenging to find a CPA or Tax Return Preparer who can correctly do this. Should I even ask if this can be done using Turbo Tax?
Great Video by the way. Thank you for this very informative video!
We are contemplating on buying our first investment/rental property, so I am trying to research and talk to people who knows the nuances of this trade.
The "Economic Ninja" and "Real Estate Ninja" (YT Channels) have some advice ... though some is behind a paywall - though it is not always pricey ... I imagine this channel is selling things too - yet it is best to do your own research first - this video is a good first step.
If you only have one rental property the tax savings may not amount to the hassle - though as always it depends, void where prohibited and your mileage will vary!
Great video! what about if the house has a mortgage ? can I deduct the same amount of this or just my equity? Also can I deduct the mortgage? Last question, so if I have a home, that I dont use or I lend it to a friend, can I ask him to leave the house November and write it off? or must to be the las time of the year?
Generally, this applies regardless of whether the property is financed or not. So, this applies to the full purchase price of the property, not just the equity. In addition to this depreciation, if the property is financed, you can often write off the interest being paid as well. If you are the legal owner of the home, you can use the depreciation as a loss, regardless of whether the friend stays or leaves in the property. Generally, as mentioned in this video, you may use up to $25,000 per year in the losses, or unlock all of the passive losses if you qualify as a Real Estate Professional. If you are seeking to take advantage of the short term rental real estate professional status, then yes, your friend would need to vacate the property, and you would need to self manage (if towards the end of the year).
Several minutes in and I hear you are relieved by the prospective rental not having a pool. I'm really wanting a pool, but also planned on my current home to become a rental when I move. What's the downside of having a pool in a rental? Thanks!
Thanks Thanks and Thanks 🙏♾️
Toby, do you have a referral in the Nashville area for cost seg? Thanks, Doug
You mentioned this could be done on real estate you already sold. Then right at the end I believe you said “if you have access to it” can you elaborate?
do you recommend a HELOC for single family home investments
Where do we get tax segregation assessment? Is this something that can be done in Maryland?
Toby, you are the best!
How to assess the values, like carpets, cabinets, etc?
Hi, thanks for the great information. Quick question, if I am a US citizen living abroad would this also be applicable to foreign properties I own? Above and beyond the typical FEIE deduction of course.
Thanks for tuning in. That's a great question, have you set up a consultation with my team? I might register for a consultation so we can provide the most accurate solution. aba.link/84a6a3
Can you send a link for the company that can do the cost segregation analysis? Thanks
Cost Segregations are expensive. At what dollar figure is it worth it to do it to offset the cost of the segregation study?
I pay $600 to cost seg a new single family that I paid around 200k for and the tax savings is about 50k so ANYTHING is worth a cost seg. On the flip side I paid $7,000 for a NNN property I paid 3M for and I got a $1,075,000 deduction. Bigger the better
@@chadhewitt5650 do you mind sharing the contact info of the cost seg professional?
Do you recommend whole life policies?
My accountant is moving from California to Washington, he had mentioned being re professional to my wife years ago, but we understood she needed to be selling property herself and take courses exams and state licensing. She stopped working as nurse Rn to manage our properties. We never cost segregated and never filed as her being re pro. What a costly mistake. Please help and point me in direction of who we talk to. Thanks for great information.
This is a really good video!!
Thanks for the support!
Toby great video. Need to get a white board, maybe write it off? Once you erase it’s not as crisp
I appreciate your feedback and suggestion.
You should put in the show notes which IRS publication states the useful life of all of these items
You can look them up, at the IRS website(If you dare.) 🙂
@@johnbarry8185 haha John. I can just see the auditor from the IRS setting up algos waiting for investors to visit their site, then tracking their IP address to their physical address, and then issuing an automatic audit notification to the investor. They be pretty sneaky like that, no doubt! They prolly coined the term "click bait"😆
I like your videos one quick question are you a certified tax consultant?
Thanks for the support. Reach out to my team for a free consultation. aba.link/84a6a3
Thank you for all this info. If you can please answer this question: As an American real estate investor, does this apply if you purchase a rental in a different country? Can you still write any of that off like in this example?
You said Roof of Real Estate is depreciable at 27.5 yeas but others are saying it is a 15 year asset. Could be please reaffirm your position ?
Is there a "recapture" tax having used the separation of assets when you sell the property?
Yes. When you take depreciation of any kind, including accelerated depreciation with a cost seg, you have to repay it if you later sell the property for a high enough price to recapture that depreciation. And a cost seg moves a portion of your property to a different asset class which can be taxed at a higher recapture rate (it's no longer section 1250 property). So that's one of the reasons why you wouldn't want to do a cost seg on a property that you plan to sell in the near future.
@@tax-modernwhat if you 1031 the property instead?
@@krisnicaj Yeah, you can do that. A 1031 defers all the gains, including depreciation recapture.
When you sell this property do you pay the capture tax on the carpet the roof the other items
Hi Tom! Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby
Toby, this was the absolute best video to understand cost segs!! Thank you first of all! Is there anyone in Michigan that you would recommend to use as our CPA or would your firm be willing to take us on to evaluate our situation with 4 rental properties that we have purchased in the past year alone, cash flowing well on all, and have set up our Trust and holding company accordingly... Much appreciate all of your time and education!
Hi Matthew, thank you for leaving your comment. You can request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation.aba.link/tobyss
MI property does not rise. Barely stays flat & tends down. At least near Traverse area. Must be worse in UP.
Am I correct ?
Don't you eventually have to pay all those deductions after you get rid of the property?
What if you get the property as an inheritance?
The only thing am still confused about is doing these strategies won’t affect your ability to qualify for loans if it shows as a loss if am still wanting loans to keep investing? Doing exactly this way won’t affect anything for loan qualification