Achieve Wealth Through Value Add Real Estate Investing Podcast · James Kandasamy

Tax-Free Multifamily Millions With Cost Segregation Study Expert Yonah Weiss

·34 min·30 clips

Depreciation gets treated like a tax tool investors actually have to understand. The conversation starts with the basics: separate land from building value before calculating what can be depreciated. The early math is where things get interesting. A million-dollar property becomes the example for why land percentage, accountant assumptions, and location can shift the outcome. Land itself does not depreciate. The guest mentions a 15 percent land assumption as a national average, while some accountants use 20 percent and places like California can run much higher. Acceleration is the main move. Instead of stretching deductions over 27.5 or 39 years, parts of the property get moved into faster depreciation categories. Still, the benefit is not automatic. Long-term rentals may already have enough straight-line depreciation to wipe out regular cash flow, especially when the property does not throw off much cash. Real estate professional status changes the conversation. The guest uses the occupation line on a tax return to get into the IRS definition. Participation is the test that matters. To qualify, the taxpayer or spouse must spend more than half of personal service time materially participating in a real property trade or business. The definition stays narrow. Developing, redeveloping, constructing, reconstructing, acquiring, converting, renting, leasing, operating, managing, and brokering are the activities named. Just owning property does not get you there. In practice, the guest frames it as often owning and managing your own properties, while brokering means being a real estate broker or realtor. Passive investors should slow down here. The W-2 and passive investing questions matter because deductions do not land the same way for every taxpayer. Documentation also matters. The close gets into engineering-company work, detailed reports, methodology, numbering, property documentation, and tax-code references as signs of a serious study.

As heard by us

A practical look at when depreciation math turns into real tax leverage.

The episode does a good job of making depreciation feel less abstract. It starts with a million-dollar property and walks through how basis gets split between land and building before accelerated depreciation can even enter the picture.

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Why you'd press play

See how cost segregation changes the tax math on a property purchase.

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