Ep. 14 | Unlocking Real Estate Through Cost Segregation Studies

The Mr. R Show

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About the Guest: Heidi Henderson
Heidi is a seasoned tax professional and the Executive Vice President at Engineered Tax Services (ETS). With over two decades of experience in the tax industry, Heidi specializes in cost segregation studies and various specialty tax services, bringing extensive expertise to real estate tax strategies. Her career is marked by a dedication to helping clients legally and ethically maximize their tax benefits through engineering-based solutions. She is a distinguished speaker and a prominent figure in the tax planning community.

Episode Summary:

In this illuminating episode of the Mr. R Show presented by the MRR Institute, hosts John and Chris dive deep into the world of cost segregation studies with expert guest Heidi Henderson from Engineered Tax Services. Designed for tax professionals seeking to scale their practices, this episode explores the significant tax benefits that can be realized through strategic cost segregation, an often-overlooked practice that can substantially enhance revenue by accelerating depreciation deductions for real estate investors.

With a focus on the practical application of cost segregation, the conversation covers the basics, real-world examples, and advanced strategies. Key asset classes such as short-term rentals, commercial properties, and more are discussed in detail, highlighting the potential for tax savings. The episode further uncovers how tax professionals can partner effectively with ETS to offer robust specialty tax services, efficiently handle complex filings, and ultimately provide enhanced value to their clients. Don’t miss out on this essential guide to mastering cost segregation and boosting your tax practice.

Key Takeaways:

• Cost Segregation Basics: A cost segregation study breaks down a property into various asset classes to accelerate depreciation deductions.
• Real Estate Professional Status: Taxpayers meeting specific criteria can significantly benefit from cost segregation by converting passive income to active, thus maximizing deductions.
• Short-Term Rentals: Properties with an average stay of seven days or less qualify for beneficial tax treatments, making them prime candidates for cost segregation studies.
• Retrospective Studies: Properties purchased in previous years can still undergo cost segregation, allowing for catch-up on missed tax benefits via Form 3115.
• Partnership with ETS: Tax professionals can enhance their service offerings and client satisfaction by collaborating with ETS for specialized tax services, ensuring legal and ethical compliance.

Notable Quotes:

1. "Applying cost segregation converts to the preferable method of depreciation." - Heidi Henderson
2. "Cost segregation is the lowest hanging fruit for any real estate investor when it comes to tax planning and strategy." - Chris Picciurro
3. "There are still tax preparers out there and bookkeepers and accountants that don’t understand the value, and it really does undermine the relationship with clients in the end." - Heidi Henderson
4. "If you have someone that is rep status, this cost segregation study is a juicy opportunity for them." - Chris Picciurro
5. "We do have all of the updated or revised appreciation schedules in our studies. We also will do the form 3115 so we can do the calculations." - Heidi Henderson

Resources:

• Engineered Tax Services
• Connect with Heidi Henderson on LinkedIn

• (00:07) - Scaling and Modernizing Tax Practices for Maximum Revenue
• (02:41) - The Benefits and Misconceptions of Cost Segregation Studies
• (07:05) - Simplifying Tax Deductions and the Importance of Documentation
• (07:37) - Accelerated Depreciation Benefits Through Cost Segregation and Bonus Depreciation
• (11:11) - Boutique Firm Brings Big Four Tax Strategies to Small Clients
• (13:11) - Maximizing Tax Benefits Through Cost Segregation Studies
• (20:09) - Tax Strategies for Real Estate Professionals and Passive Investors
• (27:32) - Tax Strategies for Real Estate Professionals
• (31:19) - Strategies for Maximizing Tax Benefits with Cost Segregation
• (37:34) - Short Term Rental Property Strategy and Tax Implications
• (38:08) - Cost Segregation Studies for Tax Benefits on Short-Term Rentals
• (46:50) - Specialty Tax Services and Energy Efficiency Incentives
• (50:15) - The Benefits of Cost Segregation for Real Estate Owners
• (56:05) - Scaling and Modernizing Your Tax Practice