When should I do a cost segregation study? It’s one of the most common questions we hear. In this video, Carlos Gonzalez from US Tax Advisors Group cuts through the complexity with a straightforward rule of thumb and the critical exceptions every investor must know.

The Golden Rule: Act Fast.
Ideally, you should conduct a cost segregation study immediately after acquiring or improving a property. Why? Every month you depreciate the property conventionally, you’re missing the opportunity to reclassify assets into faster 5-year and 15-year categories. Doing it right from the start is the cleanest, most efficient path to maximizing your accelerated depreciation.

“Ideally, you want to do it as soon as possible. That way, you're depreciating the property in the correct way from the get-go.”

But Your Strategy Dictates the Timing.
While “as soon as possible” is the ideal, smart planning is key. The right timing for you also depends on other details, like for example your investor profile:

1. Active Investors: Can typically use the generated losses immediately to offset other income. For you, the urgency is high.

2. Passive Investors: Face limitations on deducting passive losses. Spreading studies across years or exploring strategies like the short-term rental loophole might be more advantageous. “I’ve seen people strategically do one property this year and others next,” Carlos notes.

There is no one-size-fits-all answer, but the timing should be a strategic decision, not an afterthought. Let our experts analyze your portfolio and income strategy to build a personalized plan that captures maximum savings at the right time for you.