Brett Philips

What if you could deduct tens of thousands of dollars from your rental property's taxable income in a single year instead of spreading those deductions over decades? That's exactly what bonus depreciation can help real estate investors accomplish. And thanks to recent changes in federal tax law, 100% bonus depreciation is back—and it's permanent under current law. When combined with a cost segregation study, bonus depreciation can become one of the most powerful tax-saving strategies...

Yes, in certain situations, depreciation generated through a cost segregation study can help offset W-2 income. But there is an important catch. A cost segregation study creates or accelerates depreciation deductions. Whether those deductions can actually offset your wages depends primarily on the passive activity rules and how your rental activity is classified. For many real estate investors, this is where short-term rentals can become particularly interesting. First: What Does Cost...

When you buy a rental property, the building itself is generally depreciated over 27.5 years for residential rental property or 39 years for nonresidential real estate. But here’s what many real estate investors don't realize: Not everything you purchased is necessarily a 27.5- or 39-year asset. A cost segregation study identifies components of a property that may qualify for shorter depreciation periods—often 5, 7, or 15 years. Depending on current tax law and when the property is placed in...