This article from the CIRE Magazine has some excellent ideas and commentary regarding end of year tax strategies for investors. One strategy in particular that I think many smaller sized investors don’t think about or who don’t have a CPA/tax strategist working for them (can you say Turbo Tax?) to recommend is cost segregation. I’m not saying that this is something that ALL investors can utilize but if you have properties where this strategy could apply it would be in your best interests to check it out and see if it can save you money – because, as my partner, Michael, likes to say – it’s not about how much cash flow your property makes, but how much of it you get to keep that’s important.
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Good advice with one addition. I represent a cost segregation company and can say with certainty that property owners who do use a CPA need to take a closer look at this opportunity. Do not assume that your CPA is familiar with cost segregation or the tremendous benefit you may have access to. From personal experience, I can tell you that very few local and regional firms have learned about cost segregation, and even when educated on the basics are hesitant to recommend the service to their clients. It is not uncommon for the property owner to take cost segregation to their CPA rather than the other way around.
Tom
Thanks, Tom, that is good information for people to have. So, the lesson to investors is that you need to become as educated as possible to the options available to you and that may provide you with beneficial tax treatment. You are right in that I have seen some CPAs tout their services for cost segregation but they have been few and far between.
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