{"id":6852,"date":"2023-06-15T07:00:43","date_gmt":"2023-06-15T14:00:43","guid":{"rendered":"https:\/\/rentalrealestate.com\/?page_id=6852"},"modified":"2024-01-16T07:06:14","modified_gmt":"2024-01-16T15:06:14","slug":"cost-segregation","status":"publish","type":"page","link":"https:\/\/rentalrealestate.com\/finance\/taxes\/cost-segregation\/","title":{"rendered":"Rental Property Cost Segregation in 2024"},"content":{"rendered":"\n<p>Last Updated: <strong>January 2024<\/strong><\/p>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-1 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/cost-segregation.png\" alt=\"Rental Property Cost Segregation\" class=\"wp-image-6832 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-120x120.png 120w\" data-sizes=\"(max-width: 512px) 100vw, 512px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 512px; --smush-placeholder-aspect-ratio: 512\/512;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/cost-segregation.png\" alt=\"Rental Property Cost Segregation\" class=\"wp-image-6832\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-120x120.png 120w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/noscript><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\">\n<p>Cost segregation has been in the U.S tax code for more than 60 years, but recent rulings and specialized professionals have brought this <a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/\">real estate tax strategy<\/a> into greater awareness. Rental property cost segregation involves breaking down the property into its various components, so that some of which can be depreciated over a shorter life span, as compared to standard longer term depreciation timelines. While cost segregation can offer significant tax benefits, it&#8217;s important for <a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/real-estate-professional\/\">real estate professionals<\/a> and investors to work with a skilled tax professional to accurately comply with IRS regulations.<\/p>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-2 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\">\n<div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><h2>On This Page<\/h2><ul><li><a href=\"#h-what-is-a-cost-segregation-study\" data-level=\"2\">What is a Cost Segregation Study?<\/a><\/li><li><a href=\"#h-how-to-do-a-cost-segregation-study-actionable-steps\" data-level=\"2\">How to Do a Cost Segregation Study? (Actionable Steps)<\/a><\/li><li><a href=\"#h-cost-segregation-example\" data-level=\"2\">Cost Segregation Example<\/a><\/li><li><a href=\"#h-cost-segregation-pros-and-cons\" data-level=\"2\">Cost Segregation Pros and Cons<\/a><\/li><li><a href=\"#h-rental-property-cost-segregation-faq\" data-level=\"2\">Rental Property Cost Segregation FAQ<\/a><\/li><\/ul><\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\"><div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/rentalrealestate.com\/products\/\"><img loading=\"lazy\" decoding=\"async\" width=\"3200\" height=\"2500\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png\" alt=\"\" class=\"wp-image-18455 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png 3200w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-300x234.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1024x800.png 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-768x600.png 768w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1536x1200.png 1536w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-2048x1600.png 2048w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1568x1225.png 1568w\" data-sizes=\"(max-width: 3200px) 100vw, 3200px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 3200px; --smush-placeholder-aspect-ratio: 3200\/2500;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"3200\" height=\"2500\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png\" alt=\"\" class=\"wp-image-18455 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png 3200w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-300x234.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1024x800.png 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-768x600.png 768w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1536x1200.png 1536w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-2048x1600.png 2048w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1568x1225.png 1568w\" data-sizes=\"(max-width: 3200px) 100vw, 3200px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 3200px; --smush-placeholder-aspect-ratio: 3200\/2500;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"3200\" height=\"2500\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png\" alt=\"\" class=\"wp-image-18455\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png 3200w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-300x234.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1024x800.png 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-768x600.png 768w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1536x1200.png 1536w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-2048x1600.png 2048w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1568x1225.png 1568w\" sizes=\"(max-width: 3200px) 100vw, 3200px\" \/><\/noscript><\/noscript><\/a><\/figure><\/div><\/div>\n<\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-default\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-a-cost-segregation-study\">What is a Cost Segregation Study?<\/h2>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-3 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/cost-segregation-study-1024x576.png\" alt=\"Cost Segregation Study\" class=\"wp-image-14892 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-study-1024x576.png 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-study-300x169.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-study-768x432.png 768w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-study.png 1200w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/576;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/cost-segregation-study-1024x576.png\" alt=\"Cost Segregation Study\" class=\"wp-image-14892\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-study-1024x576.png 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-study-300x169.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-study-768x432.png 768w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-study.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/noscript><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>Cost segregation is a tax planning strategy used by real estate investors that accelerates the <a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/deductions\/\">depreciation deductions a taxpayer can claim<\/a> for certain property assets. A cost segregation study involves hiring a qualified professional to properly identify and separate personal property assets, which can be depreciated over a shorter time frame (usually 5, 7, or 15 years), from real property assets that are depreciated over a longer period (typically 27.5 years for residential property, and 39 years for non-residential). This results in higher depreciation expense in the early years of property ownership, reducing taxable income, and thus lowering the tax liability.<\/p>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button has-custom-width wp-block-button__width-100 has-custom-font-size is-style-fill has-small-font-size\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/rentalrealestate.com\/dictionary\/\" style=\"border-radius:10px\">More Rental Real Estate Definitions\u00a0\u2192<\/a><\/div>\n<\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-do-a-cost-segregation-study-actionable-steps\">How to Do a Cost Segregation Study? (Actionable Steps)<\/h2>\n\n\n\n<p>A cost segregation study can be very beneficial when done correctly. Much like a <a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/1031-exchange\/\">1031 exchange<\/a>, the&nbsp; process requires specialized knowledge, making it advisable to engage with a professional experienced in conducting these studies. Here&#8217;s an overview of the steps:<\/p>\n\n\n\n<ol>\n<li><strong>Hire a Cost Segregation Specialist:<\/strong> Start by finding an expert, such as a certified public accountant (CPA) or a construction engineer with experience in cost segregation. They&#8217;ll have the necessary knowledge of tax law and construction to accurately perform the study.<\/li>\n\n\n\n<li><strong>Property Inspection<\/strong>: The specialist will conduct a thorough site visit to inspect the property and identify assets that qualify for accelerated depreciation. This can include elements like carpeting, appliances, specialized electrical or plumbing installations, and even landscaping elements.<\/li>\n\n\n\n<li><strong>Detailed Analysis<\/strong>: Using construction cost estimating techniques, the specialist will segregate the cost of the property into different asset categories: personal property, <a href=\"https:\/\/rentalrealestate.com\/land\/\">land<\/a> improvements, and building (real property).<\/li>\n\n\n\n<li><strong>Report Preparation<\/strong>: The specialist will prepare a detailed report itemizing the segregated assets, the methodology used, and the legal justifications. This report is critical for IRS documentation and future reference in case of an audit.<\/li>\n\n\n\n<li><strong>File Taxes Accordingly<\/strong>: Use the report&#8217;s findings when preparing your tax return, or provide it to your tax preparer. The study&#8217;s results should show the amount of depreciation you can claim each year for the different asset categories.<\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-cost-segregation-example\">Cost Segregation Example<\/h2>\n\n\n\n<p>Let&#8217;s consider an example where a real estate investor purchases a <a href=\"https:\/\/rentalrealestate.com\/student-housing\/\">student housing rental property<\/a> for $1,000,000. Without a cost segregation study, the IRS would classify the entire property as real property, and it would be depreciated over 27.5 years. This means the investor could claim approximately $36,364 ($1,000,000 \/ 27.5) in depreciation expense annually.<\/p>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-4 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\">\n<p>However, with a cost segregation study, certain components of the property could be classified as personal property or land improvements and depreciated over shorter time periods. Suppose a cost segregation professional identified $200,000 worth of assets that could be classified as personal property (e.g., <a href=\"https:\/\/rentalrealestate.com\/construction\/building-products\/best-refrigerators-rental-property\/\">refrigerators<\/a>, <a href=\"https:\/\/rentalrealestate.com\/construction\/building-products\/best-flooring-types-rental-property\/\">carpeting<\/a>, window treatments) and depreciated over 5 years, and another $100,000 that could be classified as land improvements (e.g., landscaping, fencing) depreciated over 15 years. Now, instead of a single depreciation schedule, the investor has three:<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"600\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/cost-segregation-example.png\" alt=\"\" class=\"wp-image-7716 lazyload\" style=\"--smush-placeholder-width: 600px; --smush-placeholder-aspect-ratio: 600\/600;width:378px;height:378px\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-example.png 600w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-example-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-example-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-example-120x120.png 120w\" data-sizes=\"(max-width: 600px) 100vw, 600px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"600\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/cost-segregation-example.png\" alt=\"\" class=\"wp-image-7716\" style=\"width:378px;height:378px\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-example.png 600w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-example-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-example-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-example-120x120.png 120w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/noscript><\/figure>\n<\/div>\n<\/div>\n\n\n\n<ol>\n<li><strong>Personal Property<\/strong>: $200,000 depreciated over 5 years = approximately $40,000 per year<\/li>\n\n\n\n<li><strong>Land Improvements<\/strong>: $100,000 depreciated over 15 years = approximately $6,667 per year<\/li>\n\n\n\n<li><strong>The remaining &#8220;real property&#8221;<\/strong>: $700,000 depreciated over 27.5 years = approximately $25,455 per year<\/li>\n<\/ol>\n\n\n\n<p>So in the first five years, the investor is now claiming approximately $72,122 ($40,000 + $6,667 + $25,455) in depreciation annually instead of just $36,364, significantly reducing their taxable income for those years.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-cost-segregation-pros-and-cons\">Cost Segregation Pros and Cons<\/h2>\n\n\n\n<p>Cost segregation can be a powerful <a href=\"https:\/\/rentalrealestate.com\/tools\/\">tool for real estate investors<\/a> looking to get the most out of their depreciation deductions, but like any investment strategy, it has its advantages and disadvantages. Understanding these pros and cons can help investors make informed decisions about whether a cost segregation study is suitable for their situation.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Cost Segregation Pros<\/th><th>Cost Segregation Cons<\/th><\/tr><\/thead><tbody><tr><td><strong>Accelerated Depreciation<\/strong>: While it cannot reduce <a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/rates\/\">annual property taxes<\/a>, cost segregation can significantly accelerate depreciation deductions, reducing current-year tax liability.<\/td><td><strong>Cost of Study<\/strong>: Conducting a cost segregation study can be expensive, as it often requires the expertise of a specialist such as a CPA or engineer.<\/td><\/tr><tr><td><strong>Improved Cash Flow<\/strong>: The tax savings from increased depreciation can enhance an investor&#8217;s cash flow, which can be reinvested to <a href=\"https:\/\/rentalrealestate.com\/finance\/investing\/\">grow their real estate portfolio<\/a>.<\/td><td><strong>Increased Audit Risk<\/strong>: <a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/p5653.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">Cost segregation studies can potentially increase the risk of an IRS audit<\/a>, as the IRS may scrutinize the depreciation categories more closely.<\/td><\/tr><tr><td><strong>Catch-Up Depreciation<\/strong>: Investors can claim &#8220;catch-up&#8221; depreciation in the first year for properties owned for several years without filing an amended tax return.<\/td><td><strong>Recapture Tax<\/strong>: When a rental property is sold, the IRS may recapture the depreciation at a 25% rate, which could potentially lead to higher taxes upon sale.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-group alignfull has-midnight-gradient-background has-background\" style=\"padding-top:35px;padding-right:25px;padding-bottom:50px;padding-left:25px\"><div class=\"wp-block-group__inner-container is-layout-flow wp-container-core-group-is-layout-1 wp-block-group-is-layout-flow\">\n<h3 class=\"wp-block-heading has-background-color has-text-color has-link-color has-x-large-font-size wp-elements-bafca213486a9b98a73751665cd8d9f4\" id=\"h-the-1-rental-property-newsletter\">The #1 Rental Property Newsletter<\/h3>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-5 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:66.66%\">\n<p class=\"has-background-color has-text-color has-link-color wp-elements-9f863b655fc7d93200a7564c3b902062\">Once a month, we send out an exclusive Rental Property Market Update with top stories, current mortgage rates, building products, and more. No spam and unsubscribe anytime.<\/p>\n\n\n<script>(function() {\n\twindow.mc4wp = window.mc4wp || {\n\t\tlisteners: [],\n\t\tforms: {\n\t\t\ton: function(evt, cb) {\n\t\t\t\twindow.mc4wp.listeners.push(\n\t\t\t\t\t{\n\t\t\t\t\t\tevent   : evt,\n\t\t\t\t\t\tcallback: cb\n\t\t\t\t\t}\n\t\t\t\t);\n\t\t\t}\n\t\t}\n\t}\n})();\n<\/script><!-- Mailchimp for WordPress v4.9.13 - https:\/\/wordpress.org\/plugins\/mailchimp-for-wp\/ --><form id=\"mc4wp-form-1\" class=\"mc4wp-form mc4wp-form-5481\" method=\"post\" data-id=\"5481\" data-name=\"Reusable\" ><div class=\"mc4wp-form-fields\"><p>\r\n  <label>\r\n\t\t<small><input type=\"email\" name=\"EMAIL\" placeholder=\"Your Email Address\" required style=\"width:70%\"\/><\/small>\r\n\r\n  &nbsp;<input type=\"submit\" value=\"Subscribe\" style=\"background-color:white; color:#3e69dc;\"\/>\r\n<\/label>\r\n\r\n<\/p><\/div><label style=\"display: none !important;\">Leave this field empty if you're human: <input type=\"text\" name=\"_mc4wp_honeypot\" value=\"\" tabindex=\"-1\" autocomplete=\"off\" \/><\/label><input type=\"hidden\" name=\"_mc4wp_timestamp\" value=\"1715678541\" \/><input type=\"hidden\" name=\"_mc4wp_form_id\" value=\"5481\" \/><input type=\"hidden\" name=\"_mc4wp_form_element_id\" value=\"mc4wp-form-1\" \/><div class=\"mc4wp-response\"><\/div><\/form><!-- \/ Mailchimp for WordPress Plugin -->\n<\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:33.33%\">\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/newspaper.png\" alt=\"\" class=\"wp-image-9240 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/newspaper.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/newspaper-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/newspaper-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/newspaper-120x120.png 120w\" data-sizes=\"(max-width: 512px) 100vw, 512px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 512px; --smush-placeholder-aspect-ratio: 512\/512;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/newspaper.png\" alt=\"\" class=\"wp-image-9240\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/newspaper.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/newspaper-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/newspaper-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/newspaper-120x120.png 120w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/noscript><\/figure>\n<\/div>\n<\/div>\n<\/div><\/div>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-rental-property-cost-segregation-faq\">Rental Property Cost Segregation FAQ<\/h2>\n\n\n\n<h3 class=\"wp-block-heading has-huge-font-size\" id=\"h-is-cost-segregation-worth-it\">Is Cost Segregation Worth It?<\/h3>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-6 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:66.66%\">\n<p>Whether a cost segregation study is worth it for rental properties largely depends on the specific circumstances of the property and its owner. The strategy can provide significant tax benefits and improved cash flow through accelerated depreciation, which can be especially beneficial for high-income investors seeking immediate tax reductions. <\/p>\n\n\n\n<p>However, the up-front costs of conducting a cost segregation study, the potential increase in audit risk, and the possibility of <a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/sale\/\">recapture tax upon selling the rental propert<\/a>y should be considered. Furthermore, the depreciation deductions are front-loaded, meaning they&#8217;ll be smaller in later years.<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:33.33%\">\n<div class=\"wp-block-group\" style=\"border-width:1px;border-radius:10px;padding-top:1.5rem;padding-right:var(--wp--preset--spacing--50);padding-bottom:1.5rem;padding-left:var(--wp--preset--spacing--50)\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-container-core-group-is-layout-3 wp-block-group-is-layout-constrained\">\n<div class=\"wp-block-group is-nowrap is-layout-flex wp-container-core-group-is-layout-2 wp-block-group-is-layout-flex\">\n<h3 class=\"wp-block-heading has-text-align-right has-secondary-color has-text-color has-huge-font-size\">Pro Tip <\/h3>\n\n\n\n<figure class=\"wp-block-image size-thumbnail\"><img loading=\"lazy\" decoding=\"async\" width=\"150\" height=\"150\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/pro-tip-150x150.png\" alt=\"\" class=\"wp-image-7621 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/pro-tip-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/pro-tip-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/pro-tip-120x120.png 120w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/pro-tip.png 512w\" data-sizes=\"(max-width: 150px) 100vw, 150px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 150px; --smush-placeholder-aspect-ratio: 150\/150;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"150\" height=\"150\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/pro-tip-150x150.png\" alt=\"\" class=\"wp-image-7621\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/pro-tip-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/pro-tip-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/pro-tip-120x120.png 120w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/pro-tip.png 512w\" sizes=\"(max-width: 150px) 100vw, 150px\" \/><\/noscript><\/figure>\n<\/div>\n\n\n\n<p class=\"has-small-font-size\">For some property owners, the benefits may outweigh the drawbacks, so it&#8217;s important to engage with a tax professional to make an informed decision based on your individual tax situation and long-term investment goals.<\/p>\n<\/div><\/div>\n<\/div>\n<\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<h3 class=\"wp-block-heading has-huge-font-size\" id=\"h-how-much-does-a-cost-segregation-cost\">How Much Does a Cost Segregation Cost?<\/h3>\n\n\n\n<p>The cost of a cost segregation study can vary greatly depending on several factors, including the size and complexity of the property, the firm or professional conducting the study, and the property&#8217;s location.  <\/p>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>A basic study for a smaller property might start around $4,000 to $5,000, while a more complex or larger property could cost $10,000 to $20,000 or even more. It&#8217;s important for property owners to consider the potential tax benefits against these up-front costs. Hiring a knowledgeable tax professional can help assess the potential return on investment of a cost segregation study for your specific circumstances.<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/cost-1024x576.png\" alt=\"\" class=\"wp-image-7717 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-1024x576.png 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-300x169.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-768x432.png 768w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost.png 1200w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/576;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/cost-1024x576.png\" alt=\"\" class=\"wp-image-7717\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-1024x576.png 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-300x169.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-768x432.png 768w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/noscript><\/figure>\n<\/div>\n<\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<h3 class=\"wp-block-heading has-huge-font-size\" id=\"h-who-can-perform-a-cost-segregation-study\">Who Can Perform a Cost Segregation Study?<\/h3>\n\n\n\n<p>A cost segregation study can be a complex process that requires a deep understanding of both tax law and construction practices. Therefore, it&#8217;s typically performed by professionals with experience in these areas. This could include Certified Public Accountants (CPAs), engineers, or firms specializing in cost segregation studies. The IRS suggests that the preparer have knowledge in pertinent areas like construction process, architectural design, engineering, <a href=\"https:\/\/rentalrealestate.com\/finance\/\">real estate finance<\/a>, tax law, and <a href=\"https:\/\/rentalrealestate.com\/finance\/appraisal-valuation\/\">property valuation<\/a>. Importantly, whoever conducts the study should be able to produce a detailed and auditable report, as the IRS may scrutinize the study in the event of an audit. Given the intricacies of a cost segregation study, it&#8217;s important to work with a knowledgeable and experienced professional to ensure accuracy and compliance with IRS regulations.<\/p>\n\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/rentalrealestate.com\/products\/\"><img loading=\"lazy\" decoding=\"async\" width=\"3200\" height=\"2500\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png\" alt=\"\" class=\"wp-image-18455 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png 3200w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-300x234.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1024x800.png 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-768x600.png 768w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1536x1200.png 1536w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-2048x1600.png 2048w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1568x1225.png 1568w\" data-sizes=\"(max-width: 3200px) 100vw, 3200px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 3200px; --smush-placeholder-aspect-ratio: 3200\/2500;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"3200\" height=\"2500\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png\" alt=\"\" class=\"wp-image-18455 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png 3200w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-300x234.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1024x800.png 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-768x600.png 768w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1536x1200.png 1536w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-2048x1600.png 2048w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1568x1225.png 1568w\" data-sizes=\"(max-width: 3200px) 100vw, 3200px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 3200px; --smush-placeholder-aspect-ratio: 3200\/2500;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"3200\" height=\"2500\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png\" alt=\"\" class=\"wp-image-18455\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad.png 3200w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-300x234.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1024x800.png 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-768x600.png 768w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1536x1200.png 1536w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-2048x1600.png 2048w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/bundle-ebook-stock-list-ad-1568x1225.png 1568w\" sizes=\"(max-width: 3200px) 100vw, 3200px\" \/><\/noscript><\/noscript><\/a><\/figure><\/div>\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-group alignfull has-midnight-gradient-background has-background\" style=\"margin-top:0;margin-bottom:0;padding-top:var(--wp--preset--spacing--50);padding-right:var(--wp--preset--spacing--50);padding-bottom:var(--wp--preset--spacing--50);padding-left:var(--wp--preset--spacing--50)\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-container-core-group-is-layout-4 wp-block-group-is-layout-constrained\">\n<h3 class=\"wp-block-heading has-background-color has-text-color has-link-color wp-elements-dde8f47ce1f6ffe96f69a7a344824e12\" id=\"h-about-the-author\">About the Author<\/h3>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-8 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:33.33%\"><div class=\"wp-block-image is-style-rounded\">\n<figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1332\" height=\"1332\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy.jpeg\" alt=\"Ryan Nelson\" class=\"wp-image-468 lazyload\" style=\"--smush-placeholder-width: 1332px; --smush-placeholder-aspect-ratio: 1332\/1332;width:175px\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy.jpeg 1332w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy-300x300.jpeg 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy-1024x1024.jpeg 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy-150x150.jpeg 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy-768x768.jpeg 768w\" data-sizes=\"(max-width: 1332px) 100vw, 1332px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"1332\" height=\"1332\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy.jpeg\" alt=\"Ryan Nelson\" class=\"wp-image-468\" style=\"width:175px\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy.jpeg 1332w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy-300x300.jpeg 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy-1024x1024.jpeg 1024w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy-150x150.jpeg 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/2022\/04\/IMG_2312-copy-768x768.jpeg 768w\" sizes=\"(max-width: 1332px) 100vw, 1332px\" \/><\/noscript><\/figure><\/div>\n\n\n<ul class=\"wp-block-social-links has-visible-labels is-style-logos-only is-content-justification-center is-layout-flex wp-container-core-social-links-is-layout-1 wp-block-social-links-is-layout-flex\"><li class=\"wp-social-link wp-social-link-linkedin  wp-block-social-link\"><a rel=\"noopener nofollow\" target=\"_blank\" href=\"https:\/\/www.linkedin.com\/in\/rnlson\/\" class=\"wp-block-social-link-anchor\"><svg width=\"24\" height=\"24\" viewBox=\"0 0 24 24\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" aria-hidden=\"true\" focusable=\"false\"><path d=\"M19.7,3H4.3C3.582,3,3,3.582,3,4.3v15.4C3,20.418,3.582,21,4.3,21h15.4c0.718,0,1.3-0.582,1.3-1.3V4.3 C21,3.582,20.418,3,19.7,3z M8.339,18.338H5.667v-8.59h2.672V18.338z M7.004,8.574c-0.857,0-1.549-0.694-1.549-1.548 c0-0.855,0.691-1.548,1.549-1.548c0.854,0,1.547,0.694,1.547,1.548C8.551,7.881,7.858,8.574,7.004,8.574z M18.339,18.338h-2.669 v-4.177c0-0.996-0.017-2.278-1.387-2.278c-1.389,0-1.601,1.086-1.601,2.206v4.249h-2.667v-8.59h2.559v1.174h0.037 c0.356-0.675,1.227-1.387,2.526-1.387c2.703,0,3.203,1.779,3.203,4.092V18.338z\"><\/path><\/svg><span class=\"wp-block-social-link-label\">LinkedIn<\/span><\/a><\/li>\n\n<li class=\"wp-social-link wp-social-link-twitter  wp-block-social-link\"><a rel=\"noopener nofollow\" target=\"_blank\" href=\"https:\/\/twitter.com\/rnlson\" class=\"wp-block-social-link-anchor\"><svg width=\"24\" height=\"24\" viewBox=\"0 0 24 24\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" aria-hidden=\"true\" focusable=\"false\"><path d=\"M22.23,5.924c-0.736,0.326-1.527,0.547-2.357,0.646c0.847-0.508,1.498-1.312,1.804-2.27 c-0.793,0.47-1.671,0.812-2.606,0.996C18.324,4.498,17.257,4,16.077,4c-2.266,0-4.103,1.837-4.103,4.103 c0,0.322,0.036,0.635,0.106,0.935C8.67,8.867,5.647,7.234,3.623,4.751C3.27,5.357,3.067,6.062,3.067,6.814 c0,1.424,0.724,2.679,1.825,3.415c-0.673-0.021-1.305-0.206-1.859-0.513c0,0.017,0,0.034,0,0.052c0,1.988,1.414,3.647,3.292,4.023 c-0.344,0.094-0.707,0.144-1.081,0.144c-0.264,0-0.521-0.026-0.772-0.074c0.522,1.63,2.038,2.816,3.833,2.85 c-1.404,1.1-3.174,1.756-5.096,1.756c-0.331,0-0.658-0.019-0.979-0.057c1.816,1.164,3.973,1.843,6.29,1.843 c7.547,0,11.675-6.252,11.675-11.675c0-0.178-0.004-0.355-0.012-0.531C20.985,7.47,21.68,6.747,22.23,5.924z\"><\/path><\/svg><span class=\"wp-block-social-link-label\">Twitter<\/span><\/a><\/li><\/ul>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:66.66%\">\n<h3 class=\"wp-block-heading has-background-color has-text-color has-link-color has-huge-font-size wp-elements-6965e01a2bf574a960932e7d9da2e854\" id=\"h-ryan-nelson\" style=\"font-style:normal;font-weight:500\">Ryan Nelson<\/h3>\n\n\n\n<p class=\"has-background-color has-text-color has-link-color wp-elements-cc7f7b0288a32ca933d5eb0ab374b0e5\">I\u2019m an investor, real estate developer, and property manager with hands-on experience in all types of real estate from single family homes up to hundreds of thousands of square feet of commercial real estate. <a href=\"https:\/\/rentalrealestate.com\/\" data-type=\"page\" data-id=\"2292\">RentalRealEstate<\/a> is my mission to create the ultimate real estate investor platform for expert resources, reviews and tools. Learn more <a href=\"https:\/\/rentalrealestate.com\/about\/\" data-type=\"page\" data-id=\"57\">about my story<\/a>.<\/p>\n\n\n\n<div style=\"height:5px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-more-rental-real-estate-tax-guides\">More Rental Real Estate Tax Guides<\/h3>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/rates\/\"><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/tax-rates-state.png\" alt=\"Rental Property Tax Rates by State\" class=\"wp-image-6825 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/tax-rates-state.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/tax-rates-state-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/tax-rates-state-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/tax-rates-state-120x120.png 120w\" data-sizes=\"(max-width: 512px) 100vw, 512px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 512px; --smush-placeholder-aspect-ratio: 512\/512;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/tax-rates-state.png\" alt=\"Rental Property Tax Rates by State\" class=\"wp-image-6825\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/tax-rates-state.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/tax-rates-state-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/tax-rates-state-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/tax-rates-state-120x120.png 120w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/noscript><\/a><figcaption class=\"wp-element-caption\"><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/rates\/\"><strong>Tax Rates<\/strong><\/a><\/figcaption><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/sale\/\"><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes-when-selling.png\" alt=\"\" class=\"wp-image-6829 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/taxes-when-selling.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/taxes-when-selling-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/taxes-when-selling-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/taxes-when-selling-120x120.png 120w\" data-sizes=\"(max-width: 512px) 100vw, 512px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 512px; --smush-placeholder-aspect-ratio: 512\/512;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes-when-selling.png\" alt=\"\" class=\"wp-image-6829\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/taxes-when-selling.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/taxes-when-selling-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/taxes-when-selling-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/taxes-when-selling-120x120.png 120w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/noscript><\/a><figcaption class=\"wp-element-caption\"><strong><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/sale\/\">Selling Taxes<\/a><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/deductions\/\"><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/deductions.png\" alt=\"\" class=\"wp-image-6830 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/deductions.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/deductions-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/deductions-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/deductions-120x120.png 120w\" data-sizes=\"(max-width: 512px) 100vw, 512px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 512px; --smush-placeholder-aspect-ratio: 512\/512;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/deductions.png\" alt=\"\" class=\"wp-image-6830\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/deductions.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/deductions-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/deductions-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/deductions-120x120.png 120w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/noscript><\/a><figcaption class=\"wp-element-caption\"><strong><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/deductions\/\">Deductions<\/a><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/1031-exchange\/\"><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/1031-exchange.png\" alt=\"\" class=\"wp-image-6831 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/1031-exchange.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/1031-exchange-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/1031-exchange-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/1031-exchange-120x120.png 120w\" data-sizes=\"(max-width: 512px) 100vw, 512px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 512px; --smush-placeholder-aspect-ratio: 512\/512;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/1031-exchange.png\" alt=\"\" class=\"wp-image-6831\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/1031-exchange.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/1031-exchange-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/1031-exchange-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/1031-exchange-120x120.png 120w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/noscript><\/a><figcaption class=\"wp-element-caption\"><strong><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/1031-exchange\/\">1031 Exchange<\/a><\/strong><\/figcaption><\/figure>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-10 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/cost-segregation\/\"><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/cost-segregation.png\" alt=\"\" class=\"wp-image-6832 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-120x120.png 120w\" data-sizes=\"(max-width: 512px) 100vw, 512px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 512px; --smush-placeholder-aspect-ratio: 512\/512;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/cost-segregation.png\" alt=\"\" class=\"wp-image-6832\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/cost-segregation-120x120.png 120w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/noscript><\/a><figcaption class=\"wp-element-caption\"><strong><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/cost-segregation\/\">Cost Segregation<\/a><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/opportunity-zone\/\"><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/opportunity-zone.png\" alt=\"\" class=\"wp-image-6833 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/opportunity-zone.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/opportunity-zone-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/opportunity-zone-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/opportunity-zone-120x120.png 120w\" data-sizes=\"(max-width: 512px) 100vw, 512px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 512px; --smush-placeholder-aspect-ratio: 512\/512;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/opportunity-zone.png\" alt=\"\" class=\"wp-image-6833\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/opportunity-zone.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/opportunity-zone-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/opportunity-zone-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/opportunity-zone-120x120.png 120w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/noscript><\/a><figcaption class=\"wp-element-caption\"><strong><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/opportunity-zone\/\">Opportunity Zones<\/a><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/real-estate-professional\/\"><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/real-estate-professional.png\" alt=\"\" class=\"wp-image-6834 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/real-estate-professional.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/real-estate-professional-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/real-estate-professional-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/real-estate-professional-120x120.png 120w\" data-sizes=\"(max-width: 512px) 100vw, 512px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 512px; --smush-placeholder-aspect-ratio: 512\/512;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/real-estate-professional.png\" alt=\"\" class=\"wp-image-6834\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/real-estate-professional.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/real-estate-professional-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/real-estate-professional-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/\/real-estate-professional-120x120.png 120w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/noscript><\/a><figcaption class=\"wp-element-caption\"><strong><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/real-estate-professional\/\">Real Estate Professional<\/a><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/\"><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" data-src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes.png\" alt=\"\" class=\"wp-image-6762 lazyload\" data-srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes-120x120.png 120w\" data-sizes=\"(max-width: 512px) 100vw, 512px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 512px; --smush-placeholder-aspect-ratio: 512\/512;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes.png\" alt=\"\" class=\"wp-image-6762\" srcset=\"https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes.png 512w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes-300x300.png 300w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes-150x150.png 150w, https:\/\/rentalrealestate.com\/wp-content\/uploads\/taxes-120x120.png 120w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/noscript><\/a><figcaption class=\"wp-element-caption\"><strong><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/\">All Rental Property Taxes<\/a><\/strong><\/figcaption><\/figure>\n<\/div>\n<\/div>\n\n\n\n<p><strong><em>Disclaimer:<\/em><\/strong><em> The information provided on this website does not, and is not intended to, constitute financial advice. As such, all information, content, and materials available on this site are for general informational purposes only. Please review our <a href=\"https:\/\/rentalrealestate.com\/editorial-standards\/\">Editorial Standards<\/a> for more info.<\/em><\/p>\n\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n<div class=\"yoast-breadcrumbs\"><span><span><a href=\"https:\/\/rentalrealestate.com\/\">Home<\/a><\/span> \u00bb <span><a href=\"https:\/\/rentalrealestate.com\/finance\/\">Finance<\/a><\/span> \u00bb <span><a href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/\">Ultimate Guide to Rental Real Estate Taxes<\/a><\/span> \u00bb <span class=\"breadcrumb_last\" aria-current=\"page\"><strong>Rental Property Cost Segregation in 2024<\/strong><\/span><\/span><\/div>","protected":false},"excerpt":{"rendered":"<p>Last Updated: January 2024 Cost segregation has been in the U.S tax code for more than 60 years, but recent rulings and specialized professionals have brought this real estate tax strategy into greater awareness. Rental property cost segregation involves breaking down the property into its various components, so that some of which can be depreciated<a class=\"more-link\" href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/cost-segregation\/\">Continue reading <span class=\"screen-reader-text\">&#8220;Rental Property Cost Segregation in 2024&#8221;<\/span><\/a><\/p>\n","protected":false},"author":142363303,"featured_media":6832,"parent":5278,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_glsr_average":0,"_glsr_ranking":0,"_glsr_reviews":0,"footnotes":""},"class_list":["post-6852","page","type-page","status-publish","has-post-thumbnail","hentry","entry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.6 (Yoast SEO v22.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Ultimate Guide to Rental Property Cost Segregation 2024<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/rentalrealestate.com\/finance\/taxes\/cost-segregation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rental Property Cost Segregation in 2024\" \/>\n<meta property=\"og:description\" content=\"Last Updated: January 2024 Cost segregation has been in the U.S tax code for more than 60 years, but recent rulings and specialized professionals have brought this real estate tax strategy into greater awareness. 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