Cost segregation study

He specialized in tax credits, incentives and cost recovery strategies that drive meaningful financial outcomes.

As a co-founder and CEO of KPKG, he has led the firm since 1999 in delivering advanced tax solutions, including cost segregation, R&D credits, and green building incentives, helping companies save more than $10 billion in taxes, and so much more.

Please welcome to the show with me, Mr. Jason Melillo.

Did I pronounce that right, Jason? I'm sorry.

Fantastic.

And so let's dive right into that.

So what, what right now, cost segregation, bonus depreciation is back to a hundred percent.

So that that's good news, right? So talk to us.

But maybe you can enlighten me.

How should they think about those two things? I'm always following the Holocaust side instead of 1031, you know.

Well, you

know, an important point you brought up there, Saul.

I actually just emailed one today.

Uh, Cost Seg Guys are-

Yeah

... you know, pretty respected.

I've used them before.

But they're, they're pretty good about, like, telling you, telling you if it's in your best interest, and sometimes the answer is like, "No, it's actually really not helpful for you." But the w- I mean, the least you can do if you haven't done it is just, like, send all your properties and just say, "Hey, what can we do here?"

Cost Seg is, uh, short for cost segregation, and one of the things, even without the, the bonus depreciation for short-term rentals, there i- there is cost segregation for real estate, which is, uh, accelerated depreciation for certain aspects of the home.

And, uh, you know, normally a home is, uh, depreciated over 27 and a half years.

It's her very first property.

She heard about cost segregation on a podcast, called somebody.

A, a trained professional walked the property, and the deduction showed up on her very first return.

The second one owns a portfolio, industrial, multi-family, couple of office buildings.

There's a family behind it, and around that family, there's a team, a tax professional, a wealth manager, an attorney, somebody running the investments full time.

Nobody on that team has ever run a cost segregation study on a single one of those buildings, not because they looked at it and passed, because it never came up.

And that's what I want to understand today.

My guest has spent 25 years working with families like that second one, and he's going to tell us how a strategy actually reaches a family and why this one so often doesn't.

Because obviously, if you've been listening to this show for any length of time, you understand that the short-term rental loophole is extremely powerful.

A lot of wealthy people do this, especially high income earners do this because they can take the tax benefits, the cost segregation, bonus depreciation against W-2 income.

But before we get to the mechanics of cost seg and bonus depreciation, that sort of thing, I think that we should stay on this thread of the emotional purchase.

Now, short-terms are kind of a different beast, right? Because a lot of times it's going to be somewhere that you want to own anyway.

I actually want to be involved in that part of it.

So get a lot more mileage out of it.

Uh, Tate, let's talk about like the million dollar question, which is, okay, we're going to assume on this show that everyone knows that bonus depreciation cost segregation is, you know, you, you get a huge tax break.

We're not going to spend an hour on it.

Brian said the self-storage industry has its own version of this pitch.

Dua cost Sega a 179D on the facility, and the tax saved over three years as a down payment on the next one.

Two myths that keep owners from ever making the list, and I hear both of them all the time.

Myth one, my building isn't a green building.

So maybe not.

Question three, right? Buy real estate and get a cost segregation study to offset your income from your job.

The income from your job.

Listen, these people who say this do not listen to my podcast.