Cost Segregation and Property Tax Reduction Tax tips and tax help to assist taxpayers by describing options for tax reduction and tax cuts through lawful tax deductions. Tax reduction and tax deferral are both generated by cost segregation.
However, this tool is not well understood by most real estate investors and by many tax preparers. The root cause of limited understanding regarding cost segregation and how it provides tax reduction is limited dissemination of factual data on the subject. The most prevalent myths include Cost segregation does not provide tax reduction, only tax deferral. Cost segregation is too expensive. It only works for properties with a cost basis of $10 to $20 million or more. Cost segregation is risky; it is a tax shelter likely to cause an audit. Cost segregation provides tax reduction by converting income which would have been taxed at the ordinary income rate (35% maximum) to income taxed at the capital gains rate (15% maximum). www.poconnor.com