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Racing Against the Clock: Optimize Your Tax Savings with Cost Segregation Before It's Too Late

Writer's picture: Rick RubergRick Ruberg

As a real estate investor, you've likely heard about the powerful tax-saving benefits of cost segregation studies. But did you know that the window of opportunity to take full advantage of this strategy is rapidly closing?


For years, real estate owners have relied on cost segregation to unlock significant upfront tax deductions by reclassifying building components into shorter depreciation schedules. This has allowed savvy investors to drastically reduce their taxable income and improve cash flow in the early stages of property ownership.


However, a critical change is on the horizon that threatens to erode these lucrative tax benefits. The Tax Cuts and Jobs Act's bonus depreciation provision, which enabled 100% write-offs for qualifying assets, is now in a phaseout period.


Bonus Depreciation Phaseout timeline looks like this:


  • 2022: 100% bonus depreciation

  • 2023: 80% bonus depreciation

  • 2024: 60% bonus depreciation <<You are Here.

  • 2025: 40% bonus depreciation

  • 2026: 20% bonus depreciation

  • 2027 and beyond: zero


Tick-tock, tick-tock, the clock is ticking. If you want to maximize the tax-saving power of cost segregation, you need to act quickly before this steadily diminishing bonus depreciation window slams shut.


The stakes are high. Without the advantage of accelerated deductions, your property's depreciation schedule will revert to the standard 27.5 or 39-year timelines. This means you'll face higher taxable income and a slower rate of return on your investments.


The time to take action is now. By conducting a comprehensive cost segregation study on your properties - before bonus depreciation fully phases out - you can unlock immediate tax savings that can be reinvested to fuel your real estate empire's growth.


Don't wait until it's too late.


Consult with a certified cost segregation advisor today to explore how this strategy can supercharge your portfolio's performance in the years to come.


The clock is ticking, so make haste. 🕛

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