Cost segregation
Everyone has heard it saves tax. Almost nobody is told what it is, or what it costs you later. Here is both.
The property
What it is
The IRS says a building wears out slowly — over 27½ years. So each year you write off about one twenty-eighth of it and that is your deduction.
But a building is not one thing. The appliances, the cabinets, the carpet, the special wiring, the parking lot, the fence, the landscaping — those are not the building. They wear out in five, seven or fifteen years. A cost segregation study is an engineer walking the property and writing down which is which.
Nothing about what you bought changes. You get the same deductions over the life of the property. You just get a lot of them now instead of spread over decades, and money now is worth more than money in 2055.
Put in what you paid and what the land is worth to see the numbers.
An estimate, not tax advice. First-year figures ignore the part-year convention, so a purchase late in the year gives less than shown. The state figure assumes a typical 5/7/15-year mix and the half-year convention. Federal bonus depreciation is 100% for property acquired after 19 January 2025 under P.L. 119-21. Only a study on your actual property tells you what is really in it.