How To Do A Cost Segregation Study When It Saves You Money and When It Doesn’t

In this episode, host Toby Mathis, Esq., welcomes returning guest Chris Streit to break down the truth about cost segregation studies — when they work, when they don't, and who should consider one. Chris explains how cost seg studies accelerate depreciation by separating a property's components into shorter-lived assets, enabling large year-one deductions under bonus depreciation rules. They walk through a real-world example of a $500,000 duplex to illustrate potential tax savings, and discuss who qualifies to use those losses — including real estate professionals versus passive investors. The conversation also covers the best and worst property types for cost seg, how to use studies to offset rental income across a portfolio, and whether you can apply a study retroactively after a tax year has ended. Chris shares critical red flags to watch for when hiring a cost seg firm, including improper land valuation, lack of site visits, and insufficient substantiation — all of which can expose investors to serious IRS risk. Tune in for expert, no-nonsense guidance on one of real estate's most powerful — and misunderstood — tax strategies.  Highlights/Topics: 00:00 Intro - Bonus depreciation and year one write-offs 04:01 Who should consider a cost seg study 06:06 Example 500K duplex breakdown 10:00 Real estate professional versus passive investors 14:19 Best versus worst property types for cost seg 18:25 Red flags and bad cost seg providers 22:08 Importance of site visits and proper substantiation 25:20 The biggest mistake real estate investors make 27:32 How to get started with a cost seg study Share this with business owners you know Resources: CSA Partners (Chris Streit's company — cost segregation specialists): https://csap.com/ Request a FREE Cost Segregation Benefit Analysis: https://aba.link/594e87 Anderson Advisors Free Workshop (asset protection & business structure): https://aba.link/7gdd Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons