Warehouse interior with tall pallet racks and stacks of boxed inventory

Industrial Warehouse Cost Segregation Case Study

$360,000 of a $1,800,000 industrial warehouse, 20% of the cost, deducted in the first year.

Study Summary

A $1,800,000 industrial warehouse placed in service in May 2026, studied for the 2026 tax year.

Without a study, the owner would depreciate the full cost basis as 39 year property. Our engineers identified 20% of it as 5 and 15 year property. With 100% bonus depreciation, that $360,000 was deducted in the first year, and at a 37% tax rate it added $133,200 to the owner’s cash flow in year one.

Property type
Industrial warehouse
Cost basis
$1,800,000
Placed in service
May 2026
Tax rate
37%
Bonus depreciation
100%
  • $360,000

    Accelerated depreciation, deducted in year one

  • $133,200

    Additional cash flow in year one at a 37% tax rate

  • $46,154

    Year-one deduction without a study, straight-line over 39 years

  • $396,923

    Year-one deduction with the study, more than 8 times as much

Where the $1,800,000 Went

  • 5 year property

    Process equipment, dedicated electrical and operational fixtures

    $90,0005%
  • 15 year property

    Loading area paving, yard work, fencing, site lighting and stormwater

    $270,00015%
  • 39 year property

    The warehouse shell, roof, slab and structure, left on the standard schedule

    $1,440,00080%

Year-one figures are simplified: straight-line divides the basis evenly over 39 years and leaves out the mid-month convention. Results depend on your property.

Cost Segregation Results by Property Type

Accelerated depreciation is the part of the price our engineers moved onto 5, 7 and 15 year schedules. Select a study to see its full numbers.