Cost segregation case study CS-07
Two-story office with phased renovations
A cost segregation study on a 1985 two-story office building reclassified 30.5% of acquisition and renovation costs, using an on-site inspection to separate pre-purchase work from qualified improvement property (QIP), producing about $510,000 of accelerated depreciation through 2025.
Property profile
- Property type
- Two-story office building
- Region
- Mountain West
- Year built
- 1985
- Building size
- ~16,400 SF
- Site size
- ~1.1 acres
- Study type
- Acquisition + improvements
- Tax year
- 2025
Study outcome
- Total reclassified
- 30.5%
- 5-year property
- 15.1%
- 15-year property
- 15.4%
- Bonus rate
- 100%
- Accelerated depreciation
- ~$510,000 through 2025
The property
A two-story office building purchased with renovations at different stages across its units.
What we found
Every unit was different. Some were renovated before the purchase, some were mid-renovation, and some were renovated afterward, with work spanning more than one year. Our on-site inspection let us separate what we saw on the day of the visit from what was actually complete and in service in the tax year being studied. Pre-acquisition work stayed in the purchase basis, and the owner's own completed improvements were treated as 15-year qualified improvement property (QIP).