GET AN EFFECTIVE STRATEGY TO LOWER YOUR CURRENT TAX LIABILITY! Initiating a study can be difficult but will result in better tax savings.

1. Are you a
multifamily investor?
Here is what you should know about
cost segregation
www.expertcostseg.com

2. The returns from multifamily investments are usually from income, appreciation or tax
benefits.However tax benefits are very less known.
Real estate assets tend to wear out over time and hence the owners have an option to
depreciate the value of their property every year.
One way this can be done is using a strategy named cost segregation.

3. An introduction to
cost segregation
It is a strategy that property owners use to
maximize their depreciation every year.
In the absence of cost segregation multifamily
assets can be depreciated using the straight
line depreciation method over a period of 27.5
years
But with cost segregation every part of the
property is segregated into various buckets
and depreciation is accelerated for each of
these
By segregating a property into different
buckets and depreciating it into shorter
periods depreciation can be increased and
hence tax liability can be reduced

4. Understanding the same with a simple example
TAKING THE STRAIGHT LINE METHOD INTO CONSIDERATION
Let's assume the property is worth $1million
Applying the above depreciation method $1million is divided by 27.5
Thereby, the depreciation each year would result to $36,363
COMING TO COST SEGREGATION
The components of a property are segregated into different buckets.
Parking lot fall under land improvements and can be depreciated over a period
of 15 years
Kitchen appliances come under personal property & are depreciated over 5 years

5. Cost Segregation: Categorizing a multifamily property
Land Improvements
Includes side walls and
fences.
Depreciated over a
period of 15 years
Personal Property
Includes furniture &
fixtures, carpenting &
window treatments
Depreciated over 5 or 7
years
Building
Includes roof,
plumbing,etc
Land
Any amount that
doesn't fall in the above
three come under this

6. Cost Segregation
AN EFFECTIVE STRATEGY TO LOWER YOUR CURRENT TAX LIABILITY!
Initiating a study can be difficult but will result in better tax savings.
Visit www.expertcostseg.com & get a free analysis done for your property