CASE STUDY

Warehouse Investor

Macon, GA

Highlights

In 2023, a first-time commercial property owner acquired an 18,000-square-foot warehouse in Macon, Georgia, with a tenant already in place. Focused on maximizing cash flow and minimizing his tax burden, he partnered with Cost Seg America to take full advantage of 80% Bonus Depreciation.

Our team applied IRS Approach #2—the Detailed Engineering Cost Estimate Approach—to reclassify $238,643 of the $880,000 building into short-life assets. That led to $212,3022 in first-year deductions—over nine times more than the $22,564 allowed under straight-line depreciation.

By front-loading nearly 27% of the property’s value, we unlocked immediate capital for reinvestment—giving this new investor the momentum to grow with confidence and precision.

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Statistics

$880,000

Cost Basis

Included

Improvements

$22,564

First-Year Depreciation (Straight-Line)

$212,302

First-Year Depreciation (Cost Seg + 80% Bonus)

$238,643

Total Accelerated Depreciation

27%

Depreciation Accelerated

Approach

Cost Seg America used the IRS’s gold-standard Approach 2 — the Detailed Engineering Method outlined in the IRS Cost Segregation Audit Technique Guide — to accurately classify assets and maximize allowable depreciation. This is the highest-level approach available for purchased properties.
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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.
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💡 How This Property Was Reclassified

🟦 39-Year Property: $641,357 (72.9%)

🟩 15-Year Property: $172,457 (19.6%)

🟨 7-Year Property: $355 (0.04%)

🟥 5-Year Property: $65,831 (7.5%)

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Breakdown of Reclassified Assets

39-Year Property (Structure)

Roof system, load-bearing walls, foundation, exterior siding, fireproofing

15-Year Property (Land Improvements)

Parking lot paving, perimeter fencing, site drainage, landscaping, concrete curbing

7-Year Property (Specialty Equipment)

Security system wiring, alarm sensors, network cabling, door access systems, intercoms

5-Year Property (Short-Life Assets)

Overhead dock doors, interior lighting, electrical panels, HVAC ductwork, warehouse racking systems

Summary

By partnering with Cost Seg America, this first-time investor accelerated $212,302 in first-year depreciation—more than 9x the $22,564 allowed under straight-line. Our team applied IRS Approach #2—the Detailed Engineering Cost Estimate Approach—to reclassify 27% of the warehouse’s cost basis into short-life assets, unlocking significant tax savings and immediate cash flow.

Here’s the game-changer: that deduction completely offset all of the rental income generated by the tenant—eliminating the investor’s federal income tax liability for the year. Instead of sending a check to the IRS, he used those savings to help fund his next investment property.

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

Complimentary Proposal