Missing depreciation

Missing accelerated depreciation via cost segregation study.

Let’s say of your $500K house, with 20% down, you’d depreciate the house (excluding the land) over like 27.5 years.

But a cost segregation study can allow you to accelerate depreciation on things like roof, appliances, countertops, windows, etc. so let’s say of your $500K house, the cost segregation study says you can depreciate $80K in an accelerated manner. Well, 80% of that $80K you can depreciate in 2024.

And if you have ABnB’s loophole or are a real estate professional, you can deduct that $80K * 0.8 against ‘active’ income in 2024. It moves to 60% IIRC next year.

Ok, great.

Now, let’s say you bought 5 houses.

Under the same scenario you could depreciate ($80K * 0.8) X 5 rentals.


For most people in this scenario your getting a massive return which you can use to turn right around and buy more real estate.