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Cost Segregation for Short-term Rental

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Cost Segregation for Short-term Rental

At DimovTax, we specialize in cost segregation for short-term rental properties, including Airbnb, VRBO, and similar platforms. Our team has a strong grasp of the sharing economy and in-depth knowledge of IRS regulations and tax strategies. This means we can help you get all the tax benefits you’re eligible for. Our skilled tax experts are committed to making tax planning simpler for you and helping you achieve significant tax savings.

What is a Cost Segregation?

Cost segregation is a strategic tax planning technique that allows property owners to accelerate the depreciation of certain assets within a property. Typically, buildings are depreciated over a long period of 27.5 or 39 years for residential and commercial properties, respectively. However, cost segregation enables owners of short-term rental properties to identify and reclassify certain components of a property, such as personal property, land improvements, and certain building elements, into shorter depreciation periods of 5, 7, or 15 years. By doing so, it helps increase your cash flow by reducing your taxable income in the early years of ownership.

Our Cost Segregation Services.

At DimovTax, we specialize in providing comprehensive cost segregation services tailored to maximize your tax benefits. Our services include:

  • Cost Segregation Studies: Our skilled CPAs will conduct a thorough analysis of your rental property and applying IRS guidelines. Through this detailed study, we identify components that qualify for shorter depreciation periods.
  • Asset Classification: Based on the findings of our cost segregation study, we classify your assets into appropriate categories for tax purposes. We segregate assets into various groups, such as land improvements, personal property, or building components, and apply appropriate depreciation life to each component to maximize your tax benefits.
  • Depreciation Schedule: Our team will create a comprehensive depreciation schedule tailored to your property. This schedule reflects the reclassified assets and their respective depreciation periods, enabling you to optimize tax deductions and enhance your cash flow.
  • Tax Planning and Compliance: With our in-depth knowledge of tax laws and regulations, we provide strategic tax planning advice based on the outcomes of cost segregation. We ensure that you develop a robust depreciation strategy aligned with IRS requirements while maximizing your tax benefits.
  • IRS Audit Support: If you face an IRS audit or review, our professionals will stand by your side, representing you throughout the process. We will explain the cost segregation analysis and results to the IRS, offering valuable support and helping you defend your position.

Cost segregation is a powerful tool in the arsenal of short-term rental property owners, offering significant tax benefits and improved cash flow. At DimovTax, we have a proven track record of assisting a diverse range of clients, including real estate developers, property management firms, and individual rental property owners, in achieving substantial tax savings through our tailored cost segregation services. We can help you navigate this complex process, ensuring you get the maximum possible benefits. 

Contact us today to discover how our expertise in cost segregation can transform your property’s financial trajectory and help you maximize your tax savings for rental properties.

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