Tommy Dobczyk breaks down a $1.6 million tax problem: pay $1.3 million in taxes or use cost segregation to accelerate depreciation. By reclassifying building components like flooring, lighting, and fixtures into shorter asset classes, an investor can turn a $5k-$30k list into massive immediate deductions instead of spreading them over 39 years.
Chapters
You have 2 choices with $1.6 million, pay taxes with it or invest it. I'm trying to teach cost segregation because we did cost segregation over there for the company. It's easy to do with a company, but for a person you can't, it's hard to do. You only get, you can only depreciate your asset one time. Your building gets to depreciate one time over 39 years, right?
What if you buy another building?
You only had $1.6 million to play with.
Oh, you need to make more money.
Right. Okay. So now if you, if you only can deduct $230,000, you still have to pay Uncle Sam $1. 3 something, right? So let me show you, let me show you what cost segregation does. Instead of, instead of trying to deduct the $9 million and that's it, we're still going to deduct that. But what we're going to do is we're— and we'll carry this down like this. What we're going to do is we're going to tag in there all the things that it has, like the flooring, the lights, the windows. Let's say, remember we said that machinery gets written off. This building came with car lifts in it. There's a total of 15 car lifts in here. It has. 27 refrigerators.
Like, would the desks and chairs also be?
Desks and chairs. Like, see what I'm doing now? See what we're doing? We're making a grocery list. And with this grocery list, what we're going to be able to do is this was $5,000, this was $4,000, this was $17,000. These are, these are, these are $30,000. These are—
Will your building most likely be associated with some business? So then what? So then you would transform the building into a corporation?
No, you're going to— what you're going to do is you're going to buy The building and eventually it becomes a corporation. Yeah.
Okay.
But going in, you as an investor need to cost segregate so you don't have to pay $1.6 million.
