Cost Segregation - Will I Just Pay More Taxes When I Sell the Property?

An investors tax basis is generally what they paid for the property. Since a cost segre accelerates the depreciation of a property, the investor's tax basis is decreased as a result. In this example, not only do megan and james defer the taxes into future years, they also receive permanent tax savings of at least 20%. If i write off 100 dollars in depreciation, isn't the i r s sure to audit me? This is a common fear for investors evaluating cost segregation. Fortunately, that does not appear to be the case with a large number of investor tax returns we have prepared.