Level 3

Question

Cost Seg, likely a silly question

Forum|Forum|3 years ago
October 5, 2022
3 replies
27 views

Forgive me if this comes off as dense, but is it safe to assume there is no special election or filing requirement when a cost segregation has been performed (other than correctly entering assets as stated in the study)?

ProSeries Professional

This topic has been closed for replies.

sjrcpa

Level 15

You are correct.

The more I know the more I don’t know.

L

LJHCPA

Level 4

Whoever performed your cost segregation should have included a Form 3115 which has to be filed with, or separately from the tax return. It is considered a Change in Accounting Methods, and requires IRS "permission". Check with your cost segregation provider.

sjrcpa

Level 15

Who said anything is changing? Maybe this is for an initial purchase, which is when I typically see Cost Seg studies.

The more I know the more I don’t know.

L

LJHCPA

Level 4

The OP didn't specify whether it was an initial return, or a "mid-stream" cost seg. I've dealt with about 50 of these over the years and they were all mid-stream and included the 3115. Whether the IRS would catch it is a crap shoot. You pays your money and you takes your chances.

E

Ellieb

Level 2

Hi, sorry to sound even denser...but exactly where are you entering it (cost seg studie depreciation)? It's my first time using Proseries.

T

TaxGuyBill

Level 15

@Ellieb wrote:

Hi, sorry to sound even denser...but exactly where are you entering it (cost seg studie depreciation)? It's my first time using Proseries.

You enter each asset for depreciation on an "Asset Entry Worksheet".

HOPE2

Level 7

Hi @TaxGuyBill, could you please explain more about Cost Seg, I mean for investment property to accelerate dep, client need to have a study? and can we file their tax return along with 3115?

When it works? I mean when the value of property is more than $.....

If rental income is about $25000 for a year and the amount of Dep is more than $25000, the loss is based on short-term rental can help the owner deduct as non-passive income, if he/she actively like a hotel performed!! Assume the owner has a big W-2 box1 and this loss a kind of reduce taxable income. I am right?

Does Proseries handle this way of calculation for Dep?

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