Topic: Increase cashflow through accelerated depreciation
I answered this question on a different post, thought it should be shared here as well. The question was how can you accelerate depreciation? Answer: Your lawyer was talking about a cost segregation study. It involves identify and separating short life assets from your new property basis and depreciating them separately, thus accelerating depreciation. For example, you can depreciate a 200k property over 27.5 years, OR Using cost segregation, you determine that you have 20k in 5-year assets within the home(carpet, fridge, AC, etc...) You can depreciate the 20k in assets over the next 5 years and depreciate the 180k for the property over 27.5. From the assets alone I increase my deduction by 4k a year for the next 5 years.(the house depreciation deduction doesn't get much smaller going from 200k to180k) This allows you to get a larger depreciation deduction, so you have more money now and not over the next 27 years. From my understanding, you've known what to do all along, you just don't know how to go about doing it. Normally I would tell you to talk to your tax man, but unfortunately they dont always know everything either and they charge you anyway. And cost segregation isn't the cheapest thing in the world. My recommendation would be to do more research, and try visiting DepreciateEm.com. That's what I tell all my clients. You can do your own form 4562 and print it out for free to give to your accountant. That way you can accelerate your depreciation while limiting your tax preparation fees. Hope that helps. Chris Novak looking forward to exchanging ideas
Posted by: TheTaxMan 1 Replies 1000 Views

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Posted by:GettingBy 569 Days Ago

Thanks - will check out the new site.

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