Even before you get into the world of real estate, one thing is clear: there’s a lot of tax obligations to be aware of.
The money you make from real estate investment and development is subject to strong taxation at multiple points of the process, whether you’re buying a property, renting it out, selling it on, or accounting for your entire income for the year.
As such, there are various ways to try and offset these larger tax demands and try to retain value before it’s taken right out of your pocket. And one of the most effective ways to make sure you can hold onto more of your money is through real estate cost segregation.
That’s where R.E. Cost Seg can help. Their expert engineered cost segregation studies could be invaluable to your real estate portfolio.
What is a Cost Segregation Study?
Real estate isn’t just one big asset of its own.
The property is an asset, as are certain elements, features, and fixtures that are fitted inside. For example, kitchen appliances, bathroom plumbing, flooring, garden space, etc etc.
A cost segregation study helps real estate owners and investors, as well as their accountants, separate these different real estate assets into groups so they can depreciate at a faster rate.
This is known as accelerated depreciation, and it can help you to retain more of your real estate income when it’s time to pay tax on it.
How Does Accelerated Depreciation Work?
Real estate tends to lose value as time goes on. All tangible assets have the chance to, but property (whether residential or commercial) is guaranteed to.
On top of that, assets inside a property are likely to lose value faster than the property itself. A toilet, for example, is likely to need to be repaired or replaced after just a couple of years of use.
That’s why it’s possible to claim depreciation as an expense. Assets naturally depreciate, and thus your tax bill comes in at a lower amount.
Accelerated depreciation is a tax saving method that allows you to save more of your initial investment, as you can deduct more of your property’s current value as an expense.
How Real Estate Investors Can Use Cost Segregation to Save Money
If you invest in a cost segregation study, you’ll be able to get the value of each of your depreciable assets laid out in full.
They can then be classed according to the speed they can depreciate, which allows you to claim larger deductions in the first 10 to 15 years of property ownership.
What to keep in mind
It won’t be possible to conduct a study like this on your own. You’ll need to call in a team of cost segregation pros to get the work done for you.
You’ll also need to carefully consider if accelerated depreciation is right for you. It’s not suitable for all types of investors or properties, and could even land you with larger tax bills later on down the line.
What R.E. Cost Seg Can Do to Help
Who are R.E. Cost Seg?
R.E. Cost Seg are a team of cost segregation experts with a mission to help real estate investors and their tax advisors save as much tax as possible.
They work across the entirety of the US, and they’ve helped real estate owners save over $1.5 billion on their yearly tax bills thus far.
They outline this vision extensively via their website, with a full FAQs section for more information. As such, we’re happy to see it’s easy to see both their expertise and passion for this area of real estate finances.
What Their Service Includes
So, R.E. Cost Seg are the experts in cost segregation and accelerated depreciation. But what does their service really involve?
Let’s get into the pros we’ve found down below.
Expert insight and in depth analysis
With just the one flagship service, the entire team revolves around performing cost segregation to the best of their abilities. They’re real estate tax experts and engineers who dedicate their time to cost segregation and cost segregation only.
That means you get guaranteed long standing, expert insight, as well as a more in depth analysis of your property assets and their value.
A fast turnaround
The team at R.E. Cost Seg works remotely to tour, evaluate, and estimate your property and any other assets.
This allows them to get straight to work, at a time that’s convenient for you, as they’re only a video call away. That also means your cost segregation report will be ready after only a short period of time.
Audit support
And if the IRS ever finds a reason to audit you over your tax bills, R.E. Cost Seg are more than happy to back you up.
They make a promise to stand by their segregation and depreciation valuations, and will be on hand to assist throughout the entire audit process.
The best thing about their audit support is that it comes at no extra cost either. If you get audited, their support is already entailed as part of your original package.
R.E. Cost Seg: A Good Choice for Real Estate Investors?
Real estate taxes aren’t fun to deal with. Trying to estimate the value of your property, right down to the finest details, often seems to be more complicated than its worth too.
But R.E. Cost Seg makes it much easier to approach real estate savings, especially when you’re a newbie investor looking to keep as much of your investment while you’ve got a limited budget.
And with 4.8 stars on Google Business, and plenty of happy testimonials listed on their website, we’re happy to give R.E. Cost Seg a big green thumbs up.
If you’re looking for tax advice from a team of pros who know what they’re doing, and can support you throughout the depreciation process, they could be the best choice for you.