"Andrew_Bitler" <Andrew_Bitler[at]yahoo.com> wrote:

- quote -

First, making ANY investment with the primary goal of saving
taxes is generally not a good idea. You should always make
an nvestment based on the merits of the investment itself
and THEN consider the tax implications and ways to minimize
liabilty, maximize benefit, etc and also be sure the
investment compliments or otherwise fits into your overall
portfolio strategy. Paying for professional guidance in
this area is always worth it (assuming you retain competent
advisors)..

Second, all of the previous replies gave good advice. The
cost segregation analysis is worth it if your investment is
large enough, however, if the 2 rental properties you
mentioned are single-family or duplex type housing, then
it's probably not worth doing any more than segregating and
allocating a reasonable portion of the purchase price to the
major appliances and depreciating over 7 years.

Third, it sounds like you're getting into more areas of
business and taxation than you're qualified to handle
yourself. No matter how many forums you join, you cannot
get the level of professional assistance in on-line forums
that you need to properly handle your business & tax
affairs. Making mistakes is very costly, get professional
assistance, it will be money well spent.

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Andrew_Bitler wrote:

- quote -

A lawyer told you that, eh?

Well, steer clear of that fellow, for real estate is
depreciated on straight line method over 27.5 years. Period.
There is no acceleration like there used to be.

ChEAr$,
Harlan Lunsford, EA n LA

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Andrew_Bitler wrote:
[snip]
- quote -

If you are eligible to use up to $25K passive losses to
offset ordinary income, you might want to break out the
components of your rental properties into their appropriate
depreciation life classes, for example appliances are
typically 5-year personal property rather than 27.5 year
residential real estate. This is one way of accelerating
your depreciation. Also be sure you have correctly
allocated building vs. land basis.

At a sufficiently high income level and depending on your
filing status, this offset will be limited but may be
carried forward to future tax years.

-Mark Bole

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"Andrew_Bitler" <Andrew_Bitler[at]yahoo.com> wrote:

- quote -

depreciation on real property is pretty much cut & dry
depending on whether it is residential or not determines
which depreciation schedule to use accelerated depreciation
on real property is something that is in the past -it
existed once upon a time

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

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"Andrew_Bitler" <Andrew_Bitler[at]yahoo.com> wrote:

- quote -

Accelerated depreciation means that you take the same amount
of depreciation, but take more in early years and less in
later years. Check with your tax preparer for more
information.

Stu

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"Andrew_Bitler" <Andrew_Bit...[at]yahoo.com> wrote:

- quote -

I think what your accountant was referring to is called cost
segregation. I have done this before for a client who just
bought into a large apartment complex. My cost segregation
was to separate the appliances and plumbing fixtures from
the building itself and depreciation those over 7 years. To
do full, formal cost segregation takes an engineering firm
like the one I was trained by and an analysis of the plans
of the building. They will segregate the heating and air
conditioning systems, the waste water systems and other
structural components that may be separately depreciated.
These studies and the voluminous report are costly and are
best done by the developer of a complex when it is built. I
can refer you to the firm if you wish.

Linda Dorfmont E.A., CFP, CSA

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Hello all, my name is Andrew Bitler. I am a small real
estate investor with big problems. I recently joined a bunch
of forums because there is an important issue I need to
investigate. I am utterly confused about a certain tax
strategy, so I hope you folks out there can help me out.
Here is my situation:

I want to save on taxes and that's why I invested in real
estate. In 2006 I purchased 2 rental properties. I maxed out
my deductions until I couldn't find any other way to lower
my taxable income. A lawyer told me to accelerate
depreciation on my properties, but I didn't want to have to
pay him to figure out what that means. I imagine that means
I can increase my depreciation deduction, but how? Anyone
know what he is talking about?

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