Explaining Cost Segregation and its Benefits in Real Estate Investing | 2min snip from BiggerPockets Real Estate Podcast

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823: The Tax-Free Strategy Only Real Estate Investors Can Access w/Mitchell Baldridge

BiggerPockets Real Estate Podcast

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Explaining Cost Segregation and its Benefits in Real Estate Investing

Cost segregation is like blowing up a building and categorizing its components into different tax life categories. This allows you to save money in the first year by providing your CPA with an engineering report.

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What’s the key to paying fewer taxes? A cost segregation study. Never heard of it? Most real estate investors haven’t, but we’re about to unlock a world of tax-free income earning using this specific tool. If you’ve wondered how the wealthy pay such few taxes while owning million-dollar-producing real estate, this is how. In today’s episode, you’ll learn how to use cost segregation, too, so you can keep more money in your pocket.

Taxes aren’t everyone’s favorite subject, but paying fewer taxes? You can probably get behind that. We’ve brought on CPA and CFP Mitchell Baldridge to explain how he helps real estate investors, large and small, delete their taxable income and build their real estate portfolios faster. Our own Rob Abasolo uses Mitchell’s team to cut his taxes down by more than six figures!

In this episode, we’ll explain what cost segregation is, why so many top real estate investors use it to lower their taxes, when you can (and can’t) use it on your properties, the short-term rental tax “loophole” to take advantage of, AND what happens when you do it wrong.

In This Episode We Cover:

How to wipe out your income taxes using cost segregation studies

Bonus depreciation and writing off your property faster than before

Using real estate losses to lower your W2 or business income

The short-term rental “loophole” ANYONE can use to reduce their taxable income

Carrying over losses and why top real estate investors will NEVER stop buying property

Caveats and pitfalls of cost segregation and when it can come back to bite you

And So Much More!

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