accelerated depreciation via cost segregation for rental properties

[skyper480]

For 2021 tax year, what situations should accelerated depreciation via cost segregation be recommended for rental properties or is it NOT recommended at all? Please provide the pros and cons. 

[DianeW777]

These rules apply as if each real estate rental activity is a separate business.  However, IRC section 469(c)(7)(A) allows a qualifying real estate professional to elect to treat all such activities as one.

The issue comes when one of the properties are sold which would require separating out the cost of a specific unit, and assets that belong to that unit.

The aggregation of rentals (that is only applicable to real estate professionals) is not supported by TurboTax.  And it's not a necessary requirement.

• Here is a guide for IRS Real Estate Professionals
• Also see IRS Publication 527

If this is in reference to the qualified business income deduction (QBID) more information can be found here for the required details in relationship to residential rental activities.

• How to claim QBID
• What is QBID?

[skyper480]

It looks like maybe I should rephrase my question. In what situation/s does it makes sense to take accelerated depreciation for rental properties?

[Contented]

It is best when you want to lower your taxable income more this year than in future years.  Count it now, or count it in part each year forward.  I am a customer of Turbo Tax, but here is an article that may help.  Scroll down a ways to get the input you want.  https://www.millionacres.com/taxes/depreciation/how-bonus-depreciation-affects-rental-properties/

[RobertB4444]

It only makes sense to use accelerated depreciation when the tax liabilities in the year the asset is placed in service are high enough that sacrificing future deductions is worth it to reduce immediate liabilities.

[skyper480]

is "bonus depreciation" a feature that can be used in turbo tax home and business version for 2021 tax year?

[RobertB4444]

Yes.

Here is some more info.