Examples · made-up property
Cost segregation for a dental office building you bought
Dentists, orthodontists and other practice owners who own the building their practice uses.
How it works for this kind of property
Many practice owners hold their building in a separate company that leases it to the practice. That company depreciates the building over 39 years, the life the tax code gives a commercial building.
More on how it works
A cost segregation study finds the parts of the building that wear out faster: wiring, plumbing and cabinetry that serve the dental equipment rather than the building, finishes, and site work such as the parking lot and site lighting. Those parts move to 5-, 7- and 15-year lives, and bonus depreciation lets them be deducted in the first year.
The equipment you bought on its own (chairs, imaging) is usually already on its own schedule. The study covers the building, so nothing is counted twice.
Which of the 8 studies fit
| Study | Example result |
|---|---|
| Faster depreciation (cost segregation) | Counted in this example |
| Catch-up on past years | Fits, not counted here |
| Inventory cost rules and accounting methods | Fits, not counted here |
| When home-sale income is taxed | Doesn't apply here |
| Energy-efficient home and building credits | Worth a question |
| Energy-efficient buildings and solar | Doesn't apply here |
| Research and hiring credits | Worth a question |
| Property and sales tax | Fits, not counted here |
What the engine found, for your CPA
Example: We checked 69 strategies: 11 fit, 6 need a question, 48 don't apply, and 4 are protection checks.
- Faster depreciation (cost segregation): 15-year site work (paving, lighting, fencing, landscaping); Bonus depreciation; Classification rules for this property type; Cost segregation on a building you bought; Section 179 on qualified real property
- Catch-up on past years: Accounting method changes (Form 3115)
- Inventory cost rules and accounting methods: Cash method for small businesses
- When home-sale income is taxed: No homes, condos or lots sold under contract.
- Energy-efficient home and building credits: Question: Utah state credits
- Energy-efficient buildings and solar: Bought an existing building: 179D is for energy-efficient lighting, HVAC/hot water or envelope property the owner installs (new or as a retrofit) with a certified energy model.
- Research and hiring credits: Question: Paid family leave credit (45S)
- Property and sales tax: Property tax appeal; Property tax review
Common questions
Does it matter that my own practice uses the building?
What matters is who owns the building and depreciates it. If your building company leases it to your practice, the building company claims the depreciation. Your CPA confirms how the two companies are set up and how the rent and the loss are treated.
What about the chairs and imaging equipment?
Equipment bought on its own is usually already depreciated on its own schedule. The study looks at what is built into the building, so the same dollars are never counted twice.
Does someone have to visit the building?
Nobody has to come out. You do a digital site visit yourself: film the building in about 10 minutes with the Taxtura Site Visit iPhone app or your phone's browser. Our checks flag anything that needs a CPA on our team.
The rules behind it, for your CPA
- Pub. 946 (2025) Table B-1 asset class 00.3 Land Improvements
- 26 U.S.C. 168(b)(2)(A)
- Pub. 5653 Ch. 2 L(5)
- Notice 2026-11
- Treas. Reg. 1.168(k)-2(b)(3) original use / used property (5-calendar-year lookback)...
- Instructions for Form 4562 (2025)
- 26 U.S.C. 179(b)(1)-(3), (b)(6), (c), (d)(1),(2),(5),(8), (e)
- Rev. Proc. 2025-32 sec. 3.02 and sec. 4.24
- Rev. Proc. 2023-34
- Rev. Proc. 2019-08 secs. 2.01, 3.02
- Rev. Proc. 2015-13 (as modified)
- Rev. Proc. 2025-23, as modified by Rev. Proc. 2025-28 and Rev. Proc. 2026-32
Every number on this page is an example for a made-up property, computed by our engine. Not tax advice; your CPA reviews and files.