Most Accredited Investors Miss This Real Estate Tax Strategy—Are You One of Them?
When it comes to building and preserving wealth, accredited investors typically know the playbook: diversify assets, leverage tax-advantaged investments, and stay ahead of the curve. But even among the most seasoned investors, there’s one real estate tax strategy that’s often overlooked—and it could be costing them thousands in missed savings each year.
Enter: Cost Segregation.
Cost segregation is a powerful IRS-approved strategy that allows real estate investors to accelerate depreciation on certain components of a property—think appliances, flooring, lighting, HVAC systems—essentially front-loading tax deductions into the earlier years of ownership. Instead of waiting 27.5 or 39 years for standard depreciation, investors can break out components and depreciate them over 5, 7, or 15 years.
The result? Significantly reduced taxable income in the short term, improved cash flow, and a stronger return on investment.
So why are so many accredited investors missing this opportunity?
1. It’s Not Widely Discussed.
Unless you’re working with a tax advisor who specializes in real estate or high-net-worth strategies, cost segregation might never come up. Many CPAs default to traditional depreciation because it’s simpler and safer.
2. It Sounds Complex (But It’s Not).
The term “cost segregation” can sound like something reserved for commercial real estate tycoons, but it’s applicable to residential rental properties as well—especially those valued over $500,000.
3. It Requires a Specialist.
A cost segregation study must be conducted by engineers and tax professionals with experience in construction and IRS compliance. That barrier can seem intimidating, but it pays for itself in savings—often in the tens or hundreds of thousands.
4. It Pairs Perfectly With Bonus Depreciation.
Thanks to recent tax reforms (and with bonus depreciation still phasing out), combining cost segregation with bonus depreciation can supercharge your write-offs in year one. But timing matters, and the window is closing.
The Bottom Line:
If you’re an accredited investor with real estate holdings and haven’t explored cost segregation, you could be missing one of the most effective ways to reduce your tax liability and increase your ROI.
Are you overlooking this strategy?
A quick consultation with a qualified real estate strategist team could unlock significant value—and more importantly, keep more of your money working for you.
Schedule a Meeting Today:
Company Info
This communication is neither an offer to sell nor a solicitation of an offer to buy any security. An offer may only be made via a written offering document by Prevail Alternative Assets, LLC (“Prevail”). Prevail will provide such offering documents (“Documents”) only to qualified accredited investors and has prepared this communication solely to enable you to determine whether you are interested in receiving additional information about it or the real estate project summarized above (the “Project”). This communication must be read in conjunction with the Documents prior to making any investment decision. Information about the Project contained herein has not been audited or reviewed by any third party. While projections about the Project’s future performance is based on Prevail’s experience and good faith judgments, the recipient should understand that projections are based on numerous assumptions, including that the current economic environment continues, that existing asset performance trends will continue to track business plans, that historical behavior of the Project’s property type will not change, that perception of market opportunities for disposition will hold true, and that the competitive landscape within which the Project operates will not change. Returns to investors would be contingent upon numerous events occurring and subject to considerable risks. Significant assumptions were made by Prevail to calculate the presented projections, including assumptions on the amount of leverage used by the Project, the Project having sufficient assets and cashflows, debt service and capital expenditures, the continuation of favorable leasing terms, the operating costs for the Project, the costs of taxes and insurance, the absence of claims against the Project, that lease terms (including rental rates) continue, that projected occupancy and rollover rates continue, that management and other expenses remain constant, and that property-level debt will not need to be refinanced at less favorable terms.
The Project’s future capitalization will be contingent upon numerous events occurring and subject to considerable risks. The occupancy and rollover rates of the Project will be dependent upon many factors beyond the control of the Project or Prevail. Any expression of targeted rates is merely a statement of a goal. Significant assumptions were made by Prevail to calculate the presented occupancy and rollover rates. Many factors can impact the Project’s after-tax returns, including the risk that tax laws may change. A myriad of factors may impact the Project’s ability to achieve any returns. Any number of factors could contribute to results that are materially different. All investment opportunities presented by Prevail involve substantial risk and may result in the loss of some or all of your investment. Please do not forward this email.
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