Bifalgorithm post

Everyone thinks depreciation is a magic tax-free loophole, right? But it's tax deferral, not tax permanent savings. When you buy real estate, some people will ask me and they'll say, "Well, I'll just wait five years or whatever the number they hear online and then there'll be no recapture, right?" Wrong. That is a totally different type of recapture that usually applies to listed property, things like vehicles, different circumstances. When you buy real estate at any point when you sell, you are going to have recapture, okay? And basically means whatever tax to Now, how do we get around this? You don't sell the asset, that's one option, or you do a 1031 exchange and you defer the gain. And then it literally all ends in you want to die with the property to get stuff up and basis. And that's the best case scenario from a tax perspective. And a lot of people don't realize that. And then when you have a cost segregation, which a lot of people like to do, if you do end up selling the property, you typically increase your tax because you're actually going to pay that recapture at higher rates than you would have had you not done a cost segregation. And for actual tax law from a tax attorney, subscribe.

Everyone thinks depreciation is a magic tax-free loophole, right? But it's tax deferral, not tax permanent savings. When you buy real estate, some people will…