The GC and the CPA, in the same room.
Most investors hire a contractor, then hand receipts to a CPA months later and hope the cost basis got tracked correctly. I'm both — a licensed GC and CPA in Boston — so renovation decisions and their tax treatment get planned together, before the work starts, not reconstructed after. It's a value-add renovation tax strategy from day one, not an afterthought.
Renovation costs aren't all treated the same.
A repair — fixing a leak, patching plaster — is generally deductible in the year you pay for it. A capital improvement — a new roof, a gut renovation, an addition — has to be capitalized and depreciated over time, and it also adds to your cost basis, which affects the gain (and any depreciation recapture) when you eventually sell.
Get the classification wrong, or don't track it item by item as the work happens, and you either lose deductions you were entitled to or create an audit problem later. Because I'm running the job as the GC, the itemized cost data exists from day one instead of being reconstructed from a shoebox of invoices in April.
That itemized data is also exactly what a cost segregation study needs — so a renovation done through us sets up the next tax move instead of creating extra work to catch up later. Every capital improvement adds to depreciable basis, which is the whole point of planning the renovation and the tax treatment together.
Most of our renovation work is on multifamily across Greater Boston and Southern New Hampshire. Matt is a licensed real estate agent in both states and holds a Construction Supervisor License (CSL), so the cost-basis and permitting work is scoped by someone who has actually built to code.
Construction and construction-management services are contracted separately from advisory services, and engaging them is never a condition of any tax recommendation. If another contractor is the right call, that is the recommendation you will get.
Renovation feeds the other three levers.
Nearly every renovation project touches at least one of the other services — usually more than one.
Cost Segregation
Itemized renovation costs are exactly the input a cost seg study needs to reclassify components into shorter depreciation buckets.
1031 Exchange
Renovating a replacement property from an exchange? Scope and timing matter for the exchange rules — loop us in before you sign a contractor.
REPS
Hands-on work you materially participate in can count toward the hours needed to qualify for Real Estate Professional Status — if it's tracked as you go.
The person who scoped the job
The same practice that priced and ran the renovation also files the return, so the capital-vs-repair calls are made once, correctly, not revisited.
Renovation & cost-basis planning, in plain English.
Do you act as the general contractor on the job? +
What's the difference between a repair and a capital improvement, in practice? +
How does this set up a cost segregation study? +
Can renovation hours count toward REPS? +
Do you work outside Massachusetts? +
Scope the renovation and the tax move together.
Bring the property and what you're planning to do to it. In 20 minutes we'll walk through the scope, the classification, and how it sets up a cost seg study or REPS hours.