Ep. 62 | Understanding The Cost Segregation Study

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Welcome to the Teaching Tax Flow podcast, where the goal is to empower and educate you to legally and ethically minimize taxes paid over your lifetime.

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Hey, everyone, and welcome back to the Teaching Tax Flow podcast episode 62. Today, we are gonna discuss cost segregation studies. So those of you that are familiar with them, also referred to as cost segs, we are gonna jump into this great show here, but more exciting for me and Chris is that we have one of our favorite return guests on with us who, if you haven’t met her before, you will meet her in a few. But before we do that, let’s take a brief moment as always and thank our sponsor.

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Hey, Everybody, and welcome back to the Teaching Tax Flow podcast. As always, you know where you’re at. You got here some way, shape, or form, hopefully, at your own will, and nobody forced you to do so. However, speaking of forcing people to do things, Chris Pacuro, welcome back to your own show, sir. How are you today?

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Wow. Thanks, John. I appreciate it. It’s awesome to be to be back. I am really excited about today’s show.

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We have a special guest. We haven’t had a special guest in a while. Are you

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are you implying that I’m not special? Is that what you mean by that?

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We all know we’re special in many ways.

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I will take that. I will take that. Okay. Alright. Well, tell tell everybody who’s actually joining us on today’s show besides us.

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Really yeah. I’m very excited because, this show, obviously, in the teaching tax flow community is meant for the taxpayers all over The United States. And it’s sometimes we get that opportunity to bring someone from our private CPA practice, someone that has knowledge at a very high level from a technical tax perspective, and bring them onto this show and share that with the masses. As he’s coughing, by

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the way. Let’s let’s go ahead and be honest with that one. Chris was he was it’s forcing people to do things. We forced him to take a few moments of silence last week and get over your, your little germies that you had. So welcome past reality.

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Well, you know,

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that that that it’s that time of year. But, anyway, so one of the strategies that we use in our private CPA practice, and we probably see over a hundred a year, is something called a cost segregation study. And from a tax planning and strategy perspective, it’s probably the number one bang for your dollar tax mitigation strategy, where you look at the cost of the strategy and the tax benefit. Now not everyone’s gonna be able to utilize a cost segregation study, but that’s what we’re gonna dive into today. I’m super excited to have Heidi Henderson from engineer tax service join us, and we’re in for a treat, John.

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And, Heidi, obviously, welcome back. So you you’ve been on I can’t remember exactly what number or episode we did with you guys a while back, but it’s it’s been a hot minute. So how’s things going over there in your world?

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It has been a minute. I’m so excited to be back with you guys. I always enjoy working with you, and I always enjoy the podcast as well. We just always have fun banter conversation, little banter back and forth. So thank you for having me.

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Yeah. Lots of continued growth and expansion. And, you know, our founder, Julio, one of the fabulous things about him that he says in our board meetings on an ongoing basis is I never wanna be the next blockbuster. We have to pivot. We have to grow.

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How do we do that? How do we stay ahead of the curve? How do we keep evolving? And how do we bring the best the best, services, the best solutions to our clients? And our clients are both taxpayers, but they’re also CPA firms.

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So we sort of have these two arms, and we just we do everything humanly possible to identify the need in the CPA industry and say, is there a way that we can help with that? And if so, what does that look like? And that’s just what we continue to do through our evolving growth and increase in services that we bring to the CPA industry. So it’s been a fun ride. It’s been for me thirteen years, and, I thoroughly enjoy it.

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And if anybody’s too young to have ever visited a blockbuster, I think it’s a Netflix documentary on that. Just watch it. We won’t we won’t spoil it for you, but, I guess, spoil a little bit. They failed. They’re on.

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They’re, yeah, they’re no longer present to the best of my knowledge.

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There is one. I think it was in, like, Bend, Oregon was the last blockbuster alive. It was fascinating. And I could just see a little John Schapolsky running through those aisles trying to sneak into the adult area, past that curtain where his mom was yelling at him. You know?

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It’s and remember remember the

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that that you got fined if you didn’t rewind your video before you returned it.

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Oh, yeah. That’s right.

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And You don’t rewind. Yeah. That’s just one

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of those things. Right? Can you imagine trying to tell somebody what a podcast was, like, twenty years ago? They look at you and be like, well, how do I rewind it? How do I how do I go back?

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You know, how do how do I watch this thing? Does is everybody watching it? Well, obviously, that’s the hope, but oh my gosh. Yes. So we we could talk for three hours on Blockbuster, but moral of that story, you don’t wanna be it.

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So So

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I wanna jump into the and and, again, excited to have Heidi back. Wanna jump into cost segregation studies, and, typically taxpayers aren’t going to get access to someone like Heidi or someone at Engineer Tax Service directly. They’re gonna work with their accountant, tax pro. We have a lot of tax pros that listen to this show also, so if you want an introduction, just let us know. But Heidi, can you give us a, an idea of why cost segregation studies became more popular since the Tax Cuts and Jobs Act of 2017?

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And then Yeah. Maybe two or three typical uses of them that the the normal taxpayer might see, like the short term rental loophole or or something like that.

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Yeah. Yeah. Absolutely. Okay. That’s kind of loaded questions, Chris.

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I could talk for forty five minutes on those two questions. So let me give you the high low. We’re we’re aiming for 30,000 feet, but I’m gonna try to simplify this as much as possible. That’s what I’m You know, I’ve been doing this for a long time, and we do a ton of this work. So, we have, like, okay.

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What are the what are the FAQs? The the questions everybody asks me. What are the first things if we talk about first? Again, 30,000 feet. What essentially is cost segregation?

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I compared if we’re talking to a taxpayer to the difference between filing a ten forty e z and taking your standard deduction, you know, when we were talking about having a postcard to file your tax return. Take your standard deduction. It’s great. Super easy. You can do it yourself.

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But if you have some other write offs, maybe you start to have your own side business or you’ve got some little gig going, and maybe you can write off some mileage on your car. And maybe you have a home office, and you have a few other deductions. Maybe those deductions are actually a little bit higher than that standard deduction, so you could save some money on your taxes. Great. Now you can file a ten forty, itemize your deductions, totally an option that the IRS allows.

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The only caveat is you actually have to save your receipts. You need to track those costs. You need to know what they were. You have to prove them. That’s on that’s on the taxpayer.

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And then if you can prove that, you can actually take a higher deduction. That’s how I explain cost seg cost seg essentially if you do not do a cost seg and you buy a building it’s as if we’re just taking the standard deduction for that that asset okay you buy your building if it’s commercial it’s 39 years Take it easy. CPA can do that very quickly. Drop it on the return and take your standard deduction. The cost seg is going into saying, well, actually, we can take a much larger deduction if we itemize those and say, yeah.

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Well, I didn’t actually buy a building for $2,000,000. I bought about 20,000 different things, which includes carpet and some window coverings and appliances and cabinets and a couple toilets. Everything that’s included, those are not, we know, considered to be real estate. So why would we depreciate those over thirty nine years when these are things that we can write off or have a useful life like carpet, you know, of five years, and then write it off much more quickly. But, again, it falls on having to have the data and the itemized breakout of, okay, well, I just bought a $2,000,000 building.

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I wonder how much I paid for that toilet. I guarantee you you don’t know, and your CPA certainly doesn’t know because that’s the other question. So why doesn’t my CPA do this for me? When’s the last time your CPA knew how much the windows in your building you how much you paid for the windows in that building you just bought? That’s not gonna happen.

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So that’s essentially where we come into play is to do those breakdowns. Now what happened is the Tax Cuts and Jobs Act occurred, and I call that we we literally just gave COSEC a steroid injection. It’s like, we are just going to just blow this thing up, and now we got bonus depreciation. And we have so much confusion. So I’m I’m so glad we’re doing this podcast because people are asking me, why hear COSEG is going away now?

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Like, this is or like COSEG’s going away. It’s fading. You know, it was a %. Now it’s going to nothing and it’s gonna be gone. We can’t do this anymore.

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No. COSEG’s been here for years. COSEG’s not going anywhere. Bonus depreciation is what simply says, we itemize all of these assets that you have. Maybe I pull out let’s call it 25% is five year assets, personal property that you could write off right away.

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Bonus depreciation applies to anything with a useful life that’s less than twenty years. So once we do the cost seg and then we have these categories of assets, all the sudden those assets now qualify for a bonus deduction write off which allows you to take a really large sum in the first year so we book it as five years You actually if it’s a % bonus, you get to take a % of that five year property in year one. This year, 2023, bonus depreciation is 80%. So you take 80% year one. 20 20 four goes to 60%.

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So 60% of that five year property is taken in year one. The rest the the the remaining 40% of that is then taken over the rest of that five year cycle. So even with bonus if there’s no bonus depreciation, we’ve, again, done cost seg for thirty years. Cost segregation still has significant value of giving us this upfront deduction and this inflation on what we can claim there. It’s just the bonus is going to impact the first year benefit of how that applies.

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And so

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go ahead, Paul. Yeah. You’re right. And that’s something that people have to consider understand is you’re listening to this, don’t get upset at your accountant. This is an engineering function.

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It’s not necessarily a tax foe of of tariff for the prepared tax return when you’re breaking out the components of a of a property. And, and you’re right. Just because bonus depreciation is going down to 60% now, we’re we got an election year coming up next year. So

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Mhmm.

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My you know, I I my personal opinion is I think it’s going to get put back, in some way, shape, or form, but that’s just my personal opinion.

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Yeah. Well, I was gonna mention that, Chris, because there is actually a bill in front of the house right now that includes an extension to a % bonus depreciation as well as a fix for this r and d amortization rule, completely different topic we can talk about on a different podcast. But both of those are in a bill that the house is reviewing right now and does have a lot of support on both sides. And, also, given that it’s an election year, yeah, you know, there might be a little bit of, a gain for actually passing something like that. So we we do anticipate there’s a very good chance we’ll see a % bonus come back.

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And, Heidi, here’s actually a question for you too. So a lot of our community members, you know, they their focus is investing in short term rentals. So Mhmm. Say, for example, I know we mentioned, you know, there’s a a lifespan, say, of carpet. Does it get down to the nitty gritty of, like, I mean, counting nails theoretically.

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But then also in the short term space, I mean, what does that mean for, like, furnishings? I’m sure somebody stood out there wondering that. Does that apply to that as well

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or no? Yeah. No. That’s a great question. It’s been pretty interesting because back to we’ve had cost seg for years.

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Now we have bonus. A % bonus creates this big, huge lump sum of tax benefit immediately. So what that did is because you have a first year large benefit, it made cost seg more applicable to inexpensive properties. So historically, we’re doing cost seg on buildings that are millions of dollars. Big huge property.

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Everybody’s in cost seg for years if they can use the benefit. The bonus, because of this big lump sum, all of a sudden, a a regular normal person who goes out and says, hey. I’m gonna invest in real estate and buy this this, you know, short term rental for $250,000. 5 years ago, you would have never done a cost seg on that. It the the the the cost benefit ratio didn’t really pencil out.

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So two factors. One, the the growth of and here’s back to my very first comment of having to pivot, having to be innovative, and having to get better at what we do. We have first off been able to build systems and processes to to make our systems more efficient and make it more cost effective to do these types of studies. And secondarily, the bonus depreciation inflates that first year benefit to all of a sudden, wow, it makes sense to do a cost seg on a $250,000 short term rental. So there’s part one, part two, part three then is then there’s also this sort of new rule with real estate investing that if you do short term rentals, it is actually treated as a business versus a long term rental is treated as real estate investment.

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So what happens is you have a much higher threshold of hours and involvement with that real estate in order for it to be considered active. And for listeners, active participation is king when we’re talking about real estate investing and we’re talking about if a taxpayer can use the the depreciation against their ordinary income. So that’s the key. Hey. I’m a lawyer.

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I’m a doctor. I’m a, you know, whoever making, you know, $700,000 a year and paying 50% income tax. What can I do to invest in something and be able to offset all of that high taxable income? The the way that it pencils out is really pretty astronomical because we are seeing investors buy buildings, do a cost seg, and the tax savings, depending on what state you’re in, the tax savings can oftentimes be very close to what your down payment was on the house. So it’s like you’re almost getting a rental property for free, and then you’ve got your returns on that.

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And we start to see investors just build, build, build, build, grow, grow, buy, buy. It’s pretty amazing.

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Yeah. That’s the short term rental loophole for lack of better term, short term rental tax strategy. I am gonna steal the itemized versus standard deduction. I wrote that down. Thank you.

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Hopefully Yeah. If anyone hears me say that, they don’t know that I stole it from you. I’ll give you credit for it. So that’s that’s good. One of the things to consider too is then when I talk to real estate investor or just investors all the time is, a cost segregation study might create a loss that you might not be able to use in the current year if you have passive activity losses.

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Mhmm. But imagine this. Imagine you bought a rental property, even if it’s a passive activity, and you’re able to front load a lot of deduct and let’s say you’re 55 years old, and you can front load instead of running the the the the commercial property, let’s say it’s commercial property over 40, let’s say you can front load the 20% of those deductions immediately. Mhmm. You’re gonna have ten years of tax free income.

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Right? I mean, that’s attractive also. That’s where I think I we really need to have people understand that, yes, there could be immediate tax deduction and an offset of your of other income, or it could set you up to have tax free income for many, many years, especially if we think tax rates are gonna go up, which we do believe they will. So that The cool thing about the cost if it’s a property that someone’s gonna buy and hold, and someone will inherit it one day, the cost segregation study might make sense even if it doesn’t provide that first year pop. If I told you, hey.

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You’re gonna buy a a building, and for the next ten years, any income you get from is tax free. That’s pretty attractive, especially in those high tax states. Now some of the states don’t honor bonus depreciation, which we’re not gonna this is this is a federal tax podcast that we’re we’re talking about. So

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Yeah. It’s a great point, Chris, and you’re right. I have, I have clients who are working with the CPA, and, you know, we’ll we’ll run the numbers. They’ll take those numbers and then go chat with their CPA who will say, well, no. You can’t use this or, there’s no benefit here without really looking at the big picture because, one, there are strategies to potentially get it to apply.

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But secondarily, let’s look at the plan for what to do here. One of the incredible things about cost seg is that you can actually go back. You can apply cost seg to properties you’ve owned for, I mean, forever. Actually, there’s no time limit on it. Typically, we’re like, look.

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You know, if it’s been five, six, seven years, that’s about as far back as you probably wanna go, and it can create a a a windfall of tax savings in the current tax return because you don’t have to amend. The IRS actually allows you to make a change and pull the benefit onto the next tax return. But for people who are buying assets in the current year, the only caveat to that is you have to file a form thirty one fifteen to do that onto a subsequent tax return if it’s not in the current year, which is fine. But that’s usually about another $900 or, you know, CPA is typically about a thousand dollars to complete a thirty one fifteen. So I tell people, if you think you wanna do your cost seg and they’ll say, well, I think I can’t use it this year.

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I’m gonna be able to use it next year. So I’m just gonna do the study next year. And I always tell them, but but then you gotta file thirty one fifteen. It’s like a thousand dollars more. Just do it now because to Chris’s point, it’s gonna carry forward and offset that future income that you’re generating.

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And even if it is passive, it becomes a suspended loss. So it has application, let’s say, if you sell an asset or you have some other gain situation where that suspended loss is sort of standing there just waiting to be applied. So those are factors to to always think about.

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That’s a great point because you’re creating even if you’re creating a passive activity loss, it could be used to offset other passive activity gains in the future. The other point that you made is I call the I call the strategy the get out of jail free card. If so if you’re listening to this podcast and you purchased a property of some type from September 2017 up until now, even if you didn’t do a cost segregation study the year you placed the asset in a service, you can still do a cost segregation study in on another tax year. And and, yes, there’s some more tax compliance cost to that, maybe a thousand dollars. But but let’s just let’s say your income was a hundred thousand, and this year it’s 500,000.

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This might be the year to use that that cost segregation study, assuming you could use it in the current year. So the point is, when you’re working with the tax pro and you have rental properties, or if you’re listening to this podcast right now and you have rental properties that you’ve purchased, especially over the last four years, don’t feel like, oh, I missed an opportunity. That opportunity is still sitting with us. And sometimes, it might be a blessing in disguise that you didn’t take advantage of it right away. And then so and sometimes there, you know, there’s there’s other you know, people people get all excited about muni bonds because it’s tax free.

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Well, what about real what about real estate being tax free. Right?

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Yeah.

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So that’s that’s, you know and then, obviously, the lowest hanging fruit’s gonna be someone that especially when we’re talking about the real estate space that is either a real estate professional status or short or it’s gonna be the short term rental loophole, and they’re gonna use that this year. We’ve run into Yeah. Situations where someone bought a short term rental property. Let’s say in 2022, they had a third party managing it, and for some, you know, whatever reason, they decided that they’re gonna take over management of it in 2023. They are gonna have they are gonna meet the short term rental loophole since they don’t have that third party manager.

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And guess what? You could do the cost seg in ’23 even though you bought the property in ’22. Now that fact that it’s gonna be worth it, as Heidi mentioned, to to file the what’s called a form thirty one fifteen. So what’s happening from a technical perspective is the IRS is saying, we’re gonna allow you to do an automatic change of accounting method to reset your depreciation schedule.

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Yep. Yep. Exactly. Yeah. It creates that change.

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And common questions I mean, I’ll hit on a couple of things because these these are questions I get every single day. First off, the amazing thing is the cost seg let’s say someone bought a property in 2023. It does not have to be done before December 31 to to apply it to the 2023 tax return. It just has to be done before you file the tax return. So let’s say you extend and you file in October of twenty twenty four, you can still do a cost seg before that date, and it’s gonna apply to your 2023 tax return and tax liability.

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So that’s a huge I got yeah. It’s timely right now. Hopefully, this podcast lives on for a long time. It’s gonna apply every year to think about this, but right now, it’s the end of the year. And people are like, oh, gosh.

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I have to hurry and get this done. I have two weeks. You’re nope. We’ve got plenty of time. You’re gonna get it.

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The other thing that we hear people get confused on is the bonus depreciation. This year, 2023, it’s 80%. Next year, it’s 60%. The fear is if I don’t get the cost seg done before December 31, I’m gonna lose out on 80% bonus depreciation, and it’s gonna be 60. No.

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No. No. The bonus depreciation applies to the date the asset was acquired and placed in service. So if you bought that asset in March of twenty twenty two and you didn’t do a cost seg yet, we do the cost seg now, but 2022 had a % bonus. You get the % bonus because that’s what applied in 2022.

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So the bonus is always applying to the date of the purchase, not the date we do the study. So I like to tell tell people that and put that out there so I can share this podcast and have these common questions answered right off the bat.

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That’s a great point, and that’s what we talk to clients in in the teaching tax flow system. What are the attributes of each strategy? The one that’s a p means post end of the year. So this cost seg doesn’t have to be done until we file the return next year. And there’s a lot of times that’s why in our private practice, two thirds of our clients are extensions because I wanna see our team wants to see what the tax year looks like without it.

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The other thing to remember, and I know this we’re not trying to dive in the weeds too much, but understand this, if you do a cost segregation study, we run into situations where someone had 300,000 of income. They bought a million dollar cabin and have $350,000 worth of bonus depreciation. In that case, you can actually elect out of some of the bonus depreciation based on asset class to be a real technical, so you’ve got five, seven, and fifteen year asset class, where we bait so if you’re listening to this, you’re like, oh, gosh. This guy’s getting a little too technical. We can kick the can down the road on some of the cost segregate or some of the bonus depreciation if we want, if it if you’re not gonna be able to take if if if it exceeds your actual income in that year.

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So the cost side study is just an awesome thing. We so a lot of times we pair it with in the teaching tax system, a green diagnosis. So let’s say so let’s say that situation was $300,000 of income, $3.50 of a cost seg deduction that you can take, let’s do a Roth conversion. Let’s get money out of those pretax accounts and and grow tax free. So if you’re listening, my call to action for you is if you’ve purchased a property in the last four years, let us know.

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We wanna help you out. And and the other thing is if your tax professional is not sure about a cost segregation study, that’s normal. This is something that unless you run-in the real estate circles, you’re really not used to. That’s okay. We’re happy to help them out and give them the education they need.

00:25:51.165 –> 00:26:08.460
Yep. 100%. That’s a great point because I I get that question a lot. And and my advice is, look, we do a tremendous amount of continuing education. Our goal is to also help the CPA industry better understand these practices and the strategies for deploying those.

00:26:08.805 –> 00:26:37.155
CPAs, you know, I try to explain them. It’s very much like, the medical space. If you look at that as expecting your family practice doctor to diagnose that you’ve got, you know, a blown knee and you have to do a knee replacement, you’re not gonna have your family practice doctor do that, and they’re not gonna try to tell you all the ins and outs of it. They’re gonna refer you to the specialist. And the tax world is as hard as it is to wrap our heads around, it’s probably as complex as the human body.

00:26:37.555 –> 00:26:54.390
So, and so as long as you have a CPA that’s open and willing to work with partners, work with specialists, that’s really where we come together to work together for the greater good of the taxpayer and make sure those strategies are all implemented.

00:26:55.010 –> 00:27:01.510
Awesome. Yeah. And as we kinda wrap here, I know we’re we can kinda talk. Katie, as you mentioned, you can talk for hours on this one. I do have two questions.

00:27:02.290 –> 00:27:27.640
I promise they won’t lead us down too much of a of a rabbit hole. But the first one, I know we kind of alluded to it a little bit. What’s the difference or really, is there a difference between if somebody were to buy a a pre owned home, so an existing you know, they’re buying a home off the MLS, something that’s been around for a bit, versus a new construction. Is is there a difference in that the way that you guys approach a cost seg, or is it very similar in a sense? Is it easier, more difficult?

00:27:27.945 –> 00:27:52.920
Yeah. It’s a it’s a great question. From the cost seg standpoint, it’s, it’s for for an owner, let’s say, it’s very similar. On the back end for us, our analysis is done entirely different. The way that the breakdown of assets is done is a completely different process for new construction versus, versus, acquiring an existing building.

00:27:52.920 –> 00:28:15.880
But for the taxpayer on the front end, it’s completely the same. The benefit is still almost exactly the same. Yeah. And we’re always looking at what was the basis, the tax basis, which ultimately is what was your cost for that building whether you built it or whether you, you acquired it. And that’s really the number that we’re working with on the cost side.

00:28:16.340 –> 00:28:40.330
Awesome. And then here’s my crazy question, which ironically enough, probably about twelve minutes ago, I get I get a lot of emails. But this one was talking about, long story short, eliminating blight in certain areas and why investors should consider alternative properties is actually their term they use for it, and they reference container homes, which I love container homes.

00:28:40.330 –> 00:28:40.730
Mhmm.

00:28:40.730 –> 00:28:50.590
So as wild as it sounds, is there any can you basically, can you do a cost seg if you decided to build a container home? As random as that sounds.

00:28:51.425 –> 00:29:21.855
Yeah. Yeah. That that’s a it’s a good discussion point, actually, that I’ve not had in other discussions. There is an interesting definition as to what constitute real estate or real property according to the tax code versus what is defined as movable or temporary. So those are the things that we look at when we’re saying what is the benefit of a cost seg and is a cost seg needed?

00:29:21.995 –> 00:29:54.755
In a container home, it’s typically a permanent structure assuming, you know, they’re taking in some containers, building it, building around it, putting it on a lot, and it you know, you almost can’t even tell they’re made out of containers. If the containers have wheels and you’re going to park it like it’s a tiny home and you’re gonna go park it somewhere and technically you could hook something up and drag it out of there, it’s not considered real estate. It’s actually considered personal property. The whole thing is just a write off. If it’s permanently installed, it’s considered real estate.

00:29:55.215 –> 00:30:15.045
It could look exactly the same. The the, the other comparison that we deal with and actually have this conversation more than on the container home one is mobile home parks. Mhmm. Mobile home parks are all the rage right now because the tax benefit with cost seg is just crazy. That is one of the things we discussed.

00:30:15.425 –> 00:30:50.695
Do if you’re buying a mobile home park, are you buying the actual homes that are there, or is it just the lots and the owners own the homes and they’re renting sort of the lot from you? Then if you do own some of those homes, are they movable, or are they permanently, like, set on a foundation, or are they maybe there’s a skirt around them, but, technically, you could pull it up, hook up, and drive it out. So completely different tax treatment. But, the ones that are considered movable or temporary, pretty good tax benefits related to that.

00:30:50.695 –> 00:31:01.520
Right. And the thing is, generally, you got another like, a a a container home’s probably not gonna be very expensive either. So that we’ve gotta factor in is it worth doing the study. But

00:31:01.920 –> 00:31:02.420
Mhmm.

00:31:02.640 –> 00:31:15.865
Yeah. It’s I think it’s interesting. I mean, mobile home parks do lend themselves really well for cost side studies because of all of the common area. There’s just a lot of lot of factors involved, but absolutely.

00:31:15.925 –> 00:31:32.450
You know, when I asked that question, I almost I had a moment there where I’m like, I might have stumped the experts, but of course not. Of course, you have the the very educated and correct answer to that. Right? So I appreciate that, and it was just funny. I’ve seen that come across, and and, again, I I get a lot of random emails on random stuff.

00:31:32.450 –> 00:31:35.330
I’m like, oh, it’s actually kind of fitting towards us. So That’s

00:31:35.330 –> 00:31:41.925
funny. And I I love how they the, the timing of this, like, serendipitous, questions pop up at just the right time.

00:31:42.325 –> 00:31:54.885
Absolutely. Well, in on that note too, I know we can talk on this forever. We absolutely will have you back. We’re just gonna start throwing things in your calendar so you can’t get away away from us, kinda like what I do to Chris. I just send him an invite, add it to the calendar.

00:31:54.885 –> 00:31:57.785
There. He’s he’s there. He just kinda pops up like a genie out of a bottle.

00:31:58.110 –> 00:32:05.410
Well, what I say is next time you’re in Vegas, we all need to get together. We’ll just record it. We’ll all sit on the couch and have a cool podcast little banter session.

00:32:05.790 –> 00:32:27.870
Definitely on the, the TTF roadshow. We’re we’re we’re actually, we’re setting our calendar up right now trying to look at a different conferences and and opportunities, but definitely wanna get to Vegas. Or if you get to Nashville, we’ll we’ll get together. And, yeah, we are so fortunate to have you as part of the show. And it’s we we appreciate it.

00:32:27.950 –> 00:32:29.570
We appreciate it. Absolutely.

00:32:30.510 –> 00:32:38.610
Oh, well, thank you. As I said, I I love joining you guys. It’s always fun. I love our conversations. So it’s always a pleasure, and I look forward to continue working with you guys.

00:32:38.990 –> 00:32:54.005
Absolutely. Absolutely. And for all of our listeners here, I will drop some links in the show notes as always. Echoing what Chris settled earlier on too. If if anybody has any questions on cost segregation studies as a whole or any of the topics that we touch on, feel free to always reach out to us.

00:32:54.245 –> 00:33:10.360
I mean, I could spur speak firsthand. Heidi and her team over there are fantastic. And and, Heidi, if I’m not mistaken too, you guys do offer, really a a kind of introductory call even to see if these properties are fit for a cost seg. Right? No obligation such as

00:33:10.410 –> 00:33:11.210
Yeah. Calls?

00:33:11.430 –> 00:33:20.255
Yes. Absolutely. I mean, we charge a fixed fee based on the kind the type of property and the location. We look at a few factors. We want to look at those numbers.

00:33:20.255 –> 00:33:55.300
We want to provide owners and investors the all of the facts as close as we can to what the actual results would be. And then we say, please, let’s sit down or you need to sit down with your CPA, plug this into your your tax planning scenario, look at what you’re estimating for income, and really explore what the benefit is, how you can utilize the depreciation, and what’s really the best option for you going forward. So that’s what I always recommend. We can do those relatively easy. And one other tidbit I wanna add before we close, people ask me here’s my free advice.

00:33:55.520 –> 00:34:32.180
People ask me, what are the things I should look at when I’m looking to buy a property? The number one thing, pull the tax card and see what the land value is. Because more and more over the last four years, probably two, three years, some areas, California, of all places, I don’t know what happened with the property tax assessor in Reno, Nevada, but he’s decided the land is worth gold. So you may buy an asset and pull it up and see that the land is valued at 60% of your acquisition price. And that means 60% of that purchase price, you cannot depreciate at all.

00:34:32.375 –> 00:34:56.940
So there’s my little like, here’s my free advice of the day. If you are looking to buy an asset, look to see what your land value is before you close so you know what you’re getting into. Because me personally, if I’m in it for the depreciation, I am not buying an asset that has sixty, seventy, 80 percent to land. So check that out before you close. It’s gonna be a big game changer if you make sure you got one that’s got low land

00:34:56.940 –> 00:34:57.440
tax.

00:34:57.980 –> 00:35:20.000
Literally, what we said for all of our listeners here, back to our little blockbuster reference, you can rewind this podcast and listen to that advice. It’s a lot easier than plugging a VHS tape in the good old rewinder, clicking it twice, breaking the tape, and then having to buy another one. It’s a lot easier here in 2023. So So true. That that being said, we will absolutely have you back, Heidi.

00:35:20.000 –> 00:35:49.690
As I mentioned, we will be touching on this topic time and time again. Any updates, we will absolutely put them out for everybody. And like we always close with, same time, same place, back here next week on the Teaching Tax Flow podcast. Thanks everybody for hanging out with us on today’s episode of the podcast as we dove into those cost segs and Heidi was really, really giving us some great information. And, of course, Chris is a wealth of information on the tax side.

00:35:50.150 –> 00:36:04.515
Great conversation. I had a good time. Hopefully, you did as well. Even if you had a good understanding or were completely new to cost segregation studies, hopefully, now you feel better than you did twenty five, thirty minutes ago. That’s the goal.

00:36:04.515 –> 00:36:29.695
Hopefully, we accomplished that, but also as Chris had mentioned, any questions at all, drop us a line, shoot us an email hello @teachingtaxflow.com. We’re happy to direct you over to Heidi’s team if that’s a fit. They are a fantastic, fantastic organization to work with, wealth of information. Obviously, Heidi just was the tip of the iceberg. Got us, you know, just a little bit of an insight on what they do.

00:36:29.695 –> 00:36:43.260
They do some fantastic work, are fantastic to work with. So enough about them, enough about us. Let’s talk about you. So end of the year is upon us. If you haven’t realized that yet, you have bigger problems.

00:36:43.560 –> 00:36:55.905
It’s about to happen. So that being said, go back a few episodes. We talked a little bit about those year end strategies. Check them out. You still have time to do a couple of those.

00:36:55.905 –> 00:37:11.290
I know Chris had a couple favorites in there that he had mentioned. So be sure to check those out. Again, let us know if you have any questions and always be sure to join that defeating taxes private Facebook group, defeatingtaxes.com. We’ll send you directly there. This is your private invite.

00:37:11.670 –> 00:37:14.715
So, that being said, see you very soon.

00:37:18.535 –> 00:37:39.263
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00:37:39.503 –> 00:37:47.283
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