Real estate is one of the most tax-advantaged investments available, but most investors are still leaving money on the table. A Cost Segregation Study is one of the most effective and IRS-approved ways to supercharge your cash flow and accelerate tax deductions without selling a single property.
At its core, cost segregation is about reclassifying parts of your property for faster depreciation. Instead of writing off an entire building over 30 or 40 years, you identify components such as flooring, lighting, and landscaping that can be depreciated over 5, 7, or 15 years. This approach gives you larger deductions now instead of decades later.
When you purchase or build a property, the IRS allows you to depreciate its value over time. A Cost Segregation Study breaks that property down into individual assets such as cabinetry, HVAC systems, wiring, and concrete, each with its own depreciation schedule.
This process often unlocks 20 to 40 percent of a property’s total cost for accelerated depreciation. That means a commercial or residential rental property worth $1 million could yield $200,000 to $400,000 in immediate tax deductions.
It is not a loophole; it is a tax strategy written into the code to encourage investment and business growth.
Under the One Big Beautiful Bill Act (OBBBA) and prior tax reforms, investors can take advantage of 100 percent bonus depreciation on qualifying assets. This allows you to deduct the entire cost of certain building components in the first year.
This is especially powerful for:
Imagine buying a $1.2 million rental property and claiming $350,000 in year-one deductions. At a 35 percent tax rate, that is $122,500 in real cash savings that you can reinvest in your next property, use for upgrades, or apply toward paying down debt faster.
This strategy can dramatically improve your internal rate of return (IRR) and free up capital to grow your portfolio more quickly.
At Shore Financial, we partner with top engineers and tax specialists to identify every qualifying asset and ensure your study is fully IRS-compliant. We do not just prepare tax returns; we design strategic tax blueprints that permanently reduce your taxes while helping you build generational wealth.
If you own commercial real estate, multi-family properties, or short-term rentals, a cost segregation study could be one of the most profitable financial moves you make this year.
👉 Want to know how much your property could save you? Book a Free 15-Minute Consultation today and we’ll show you exactly how cost segregation could boost your after-tax returns.
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