ACap ReCap: Financial and Tax Tips
ACap Advisors & Accountants is a boutique fee-only Wealth Management and full-service Accounting firm based in Los Angeles. We handle everything from taxes to investments to risk management and estate planning, providing comprehensive, unbiased financial advice in one location. In our ACap ReCap episodes, we discuss the latest financial news, answer the frequently received financial questions, and share financial tips with you. If you have questions or suggestions email us hello@acapam.com Find more details at https://www.acapam.com/ #financialadvisor #fiduciaryfinancialadvisor #finance #financial #money #wealthmanagement #assetmanagement #investment #tax #taxplanning
ACap ReCap: Financial and Tax Tips
Cost Segregation Explained: Maximizing Tax Deductions on Rental Properties
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Cost segregation is one of the most powerful tax strategies available to real estate investors, but it is often misunderstood.
In this episode, Ara Oghoorian breaks down how cost segregation works, why it can significantly increase depreciation deductions, and how rental property owners can use it to reduce taxable income and improve cash flow. Through a practical example, he explains how a cost segregation study reclassifies components of a building into shorter depreciation schedules, allowing investors to accelerate tax benefits.
Ara also discusses the three major advantages of cost segregation, including larger deductions, the ability to offset income from other rental properties, and potential tax savings. He then covers the drawbacks investors need to consider, including reduced future depreciation, passive activity loss limitations, and depreciation recapture when a property is sold.
Whether you own apartment buildings, commercial real estate, or are considering your first rental property investment, this episode provides a practical overview of when cost segregation may, and may not, make sense for your tax strategy.
Key Topics Discussed:
- What cost segregation is
- Accelerated depreciation explained
- Cost segregation studies and how they work
- Tax benefits for rental property owners
- Offsetting rental income with depreciation
- Passive activity loss considerations
- Depreciation recapture risks
- When cost segregation makes sense
- Common mistakes real estate investors make
For more tax and financial planning insights, visit ACAP Advisors & Accountants.
ACap's Financial Quick Tips