One asset, 39 years, no questions asked. By default a building is treated as a single 39-year asset. On a $2,548,783 medical property in Farmington, that view would have released the owner's deductions in equal, unhurried pieces, near $65,000 a year, stretched across the better part of a lifetime.
There is nothing improper about the long schedule. It is simply the assumption you inherit if nobody counts what is in the building. The code treats a property as a stack of assets with different recovery periods, and only the shell and its structural components belong on the long one.
What an engineered study looks for in a medical property
A medical building is a clinic wrapped in a shell, and most of what makes it a clinic is not the shell. The building runs 3,526 SF.
Every component was identified, measured and valued, then reconciled to what the owner paid, under the first two approaches the IRS Audit Techniques Guide describes (Approaches 1 and 2). The guide calls Approach 1 the most methodical and accurate; those two are the only approaches the Cost Seg America team uses. The result is a component schedule a CPA can import and an examiner can trace, not a percentage applied to a purchase price.
Examined as personal property, bonus eligible: Dedicated plumbing and electrical serving exam, lab and procedure equipment, medical gas infrastructure, specialized ventilation serving equipment, nurse call and data wiring, specialty lighting, removable finishes such as carpet and decorative millwork, lead shielding and specialty wall systems where the engineering supports it.
Examined as land improvements, bonus eligible: Parking lots and patient drop-off paving, sidewalks and freestanding canopies, qualifying landscaping, exterior lighting, signage foundations.
Kept with the building, 39 years: Shell, structure and foundation, roof, base HVAC and main distribution, plumbing and electrical risers, elevators, fire suppression.
Which specific items land in which category is what the study determines, from the building and the records. Counting every component finds what is actually there, which averages miss in both directions.
The result
approximately $1,000,000, 41% of the property's basis, was documented as shorter-life property and moved off the long schedule into faster federal depreciation. The rounded figure is what the engineered analysis documented on this building, to the elements of a quality study the IRS describes for its own examiners in the Cost Segregation Audit Techniques Guide, Publication 5653.
Money recovered now outruns money recovered later. Nothing about this was manufactured. The $1M always belonged to the owner. The study's job was to change when it showed up, pulling those deductions out of the far future and into the current return, where cash can go back into the business, the next acquisition, or the next opportunity.
Under the One Big Beautiful Bill Act, signed July 4, 2025, 100% bonus depreciation applies to qualifying property acquired and placed in service after January 19, 2025, automatically unless the taxpayer elects out, by property class, on the return. The short-life property an engineered study finds is exactly what qualifies. For property placed in service earlier, the bonus rate of that year applies, and a look-back study claims the catch-up in the current year.
What accelerating $1M is worth
Illustrative first-year federal income tax savings on the reclassified components, if 100% bonus depreciation applied and at a 37% federal rate: $370,000. Without a study, a full year's deduction on this basis would have been about $65,000, worth about $24,200 of tax at the same rate; the first year is prorated by the month placed in service. Illustrative only, not a promise of results: the figure is computed from this study's real reclassified amount using the assumptions shown, federal only, and your benefit depends on your tax situation, the year the property was placed in service, and the passive activity rules. Your CPA determines what applies to you.
What owners ask about a result like this
Can this still work on a property I have owned for a while? Yes. The IRS allows a look-back study on a building you already own. For a building already depreciated on two or more filed returns, the mechanism is a Form 3115 change in accounting method filed with your normal return, and the depreciation you should already have claimed comes back in a single year as a Section 481(a) catch-up, at the bonus rate of the year the property was placed in service. No amended returns. Cost Seg America prepares the computation, and the Form 3115 itself for a separate fee.
Does a result this size draw attention? The IRS does not publish its selection criteria, so no honest firm says a study will or will not be examined. What we can say is how a study holds up when it is: every Cost Seg America study is built under Approaches 1 and 2, signed by credentialed professionals, and defended by Cost Seg America for as long as you own the building, with no time limit, no hour cap and no additional fee. Across 125+ IRS examinations, zero losses and not one dollar returned.
And when the building sells? Depreciation always factors into a sale, with or without cost segregation, and your CPA plans for it in advance. For most holders the value of deductions now outweighs the treatment at exit, and a 1031 exchange can defer it. It is a planning conversation, not a reason to hold back.
Should I expect the same 41% on my building? Not automatically. An engineered study typically reclassifies 20% to 35% of depreciable basis, and the share on any one building reflects how it was built and fitted and how much surrounds it outside. A free proposal estimates yours, in writing, before any commitment.
Figures are from the completed study on this property. The owner's name and identifying details are withheld. Educational content, not tax advice; your CPA applies the results to your return.
An engineered cost segregation study on a medical property in Farmington, New Mexico reclassified approximately $1,000,000 (41%) of a $2,548,783 basis into faster federal depreciation. Engineered, not estimated, by the Cost Seg America team.
Property details
3,526 SF
Building Size