Office corridor lined with glass walled meeting rooms and pendant lights

Office Building Cost Segregation Case Study

$364,000 of a $1,400,000 office building, 26% of the cost, deducted in the first year.

Study Summary

A $1,400,000 office building placed in service in March 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 26% of it as 5 and 15 year property. With 100% bonus depreciation, that $364,000 was deducted in the first year, and at a 37% tax rate it added $134,680 to the owner’s cash flow in year one.

Property type
Office building
Cost basis
$1,400,000
Placed in service
March 2026
Tax rate
37%
Bonus depreciation
100%
  • $364,000

    Accelerated depreciation, deducted in year one

  • $134,680

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

  • $35,897

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

  • $390,564

    Year-one deduction with the study, more than 10 times as much

Where the $1,400,000 Went

  • 5 year property

    Dedicated equipment, specialty electrical and certain interior fixtures

    $224,00016%
  • 15 year property

    Parking, sidewalks, landscaping and site lighting

    $140,00010%
  • 39 year property

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

    $1,036,00074%

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.