Free Tip on Increasing Cash Flow | Le Cyr Consulting Skip to main content

Once you start making money in your career, everyone knows the best investment is real estate.

Here’s what you may not know.

If you buy a piece of real estate that you use to generate rental income, that rental income can be tax free for the first few years because of depreciation. It is passive income offset by passive losses.

To calculate the depreciation, you have to use a cost segregation analysis/study.

This allows you to accelerate the depreciation you’re claiming on your asset’s components (fixtures, counters, floors, etc) and move them forward (ie, accelerate them) based on their useful life.

“Cost Segregation is a commonly used strategic tax planning tool that allows companies and individuals who have constructed, purchased, expanded or remodeled any kind of real estate to increase cash flow by accelerating depreciation deductions and deferring federal and state income taxes.”