CASE STUDY

Office Condo

Grand Blanc, MI

Highlights

In 2022, the client purchased a $680,000 office condo in Grand Blanc, Michigan to support the expansion of her growing business. Under straight-line depreciation, she would have only written off $17,436 in the first year. Instead, our team applied IRS Approach #2—the Detailed Engineering Cost Estimate Approach—to leverage 100% Bonus Depreciation and deducted $208,785 in her first-year tax return—unlocking a substantial portion of the property’s value right away.

This reclassification turned years of deferred deductions into immediate cash flow—giving her the working capital to hire, expand, and reinvest when it mattered most. Energized by the results and impressed with the process, she has become a strong advocate for Cost Seg America, regularly referring fellow entrepreneurs looking to maximize their tax position and build momentum.

Statistics

$680,000

Cost Basis

$17,436

First-Year Depreciation (Straight-Line)

$208,785

First-Year Depreciation (Cost Seg + 100% Bonus)

$196,385

Total Accelerated Depreciation

29%

Depreciation Accelerated

Approach

Cost Seg America used the IRS’s Approach 2 — the Detailed Engineering Cost Estimate Approach outlined in the IRS Cost Segregation Audit Technique Guide — to accurately classify assets and maximize allowable depreciation.
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‍Breakdown of Reclassified Assets:

Comprehensive Data Collection – Our team gathers all relevant documents, including settlement statements, site plans, and architectural drawings, to create a complete asset profile.
On-Site Inspection – Our analysts conduct a detailed inspection to identify every critical component of the property.
Precise Asset Reclassification – Our team categorizes property components according to IRS guideline, ensuring compliance while accelerating depreciation schedules.
Optimized Depreciation Application – Our team's analysts apply MACRS to maximize tax deferrals and enhance cash flow.
Seamless CPA Collaboration – Our cost segregation report is delivered audit-ready, ensuring smooth integration into tax filings with full IRS defense.

With Cost Seg America, tax strategy is not just about compliance—it is about unlocking capital and fueling growth.

💡 How This Property Was Reclassified

🟦 39-Year Property: $483,616 (71.4%)

🟩 15-Year Property: $0 (0%)

🟨 7-Year Property: $4,411 (0.7%)

🟥 5-Year Property: $191,973 (28.3%)

Breakdown of Reclassified Assets

7-Year Property

Network cabling & data system ◦ Specialized business equipment connections

5-Year Property

LED lighting systems ◦ Decorative millwork & cabinetry ◦ Carpet and interior finishes

Summary

The results spoke for themselves. Our team applied IRS Approach #2—the Detailed Engineering Cost Estimate Approach—to conduct a cost segregation study with 100% Bonus Depreciation. As a result, the client unlocked a substantial first-year tax deduction—far beyond what traditional straight-line depreciation would have allowed.

At a 37% federal tax rate, this translated into $77,251 in real tax savings, giving the business owner immediate cash flow to reinvest in her company. That extra capital gave her breathing room and the momentum to move forward with expansion plans ahead of schedule.

What began as a smart financial move turned into a lasting partnership. The client continues to champion our services and has referred multiple other business owners who, like her, want to keep more of what they earn and grow with confidence.

At Cost Seg America, we are here to help you protect what you have purchased, maximize what is possible, and move forward with confidence.

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