Senior living

What reclassified

Specialty systems: nurse call, medical gas, dedicated HVAC and electrical, commercial kitchens and finishes. Reclassify heavily from the 39-year building.

How the study ran

1. 1

   Engineering review of the property

   CORE identifies the components that qualify for reclassification. Electrical distribution, plumbing, mechanical systems, finishes, and site improvements. Down to the level of distribution panel boards including feed wire and conduit, and interior partition walls by square foot and type.

2. 2

   Cost analysis of the identified items

   Actual invoice costs or schedules of value are used wherever they exist. Where they do not, CORE uses generally accepted national cost estimating data such as R.S. Means or Marshall & Swift.

3. 3

   Allocation to MACRS asset classes

   Direct costs are documented against the respective MACRS classes, including allocable soft costs, design fees, contractor overhead and profit, and general conditions, allocated proportionally rather than ignored.

4. 4

   Report and filing support

   You receive the study and the documentation behind it. Where a change in accounting method is required, CORE prepares the Form 3115 / 481(a) adjustment.

What the client received

• ✓A full engineered cost segregation report, audit-ready
• ✓Asset detail by MACRS class with the cost basis behind each
• ✓Form 3115 / 481(a) adjustment prepared where a method change applies
• ✓100% audit defense, through IRS appellate level, at no additional charge

More case studies

Apartment

$2,584,5421st-year tax savings

Purchase price: $9.5M

Site improvements, parking and landscaping, unit finishes, appliances, and dedicated electrical for kitchens and laundry move from 27.5 years to 5- and 15-year lives.

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Short-term rental

$353,7071st-year tax savings

Purchase price: $875,000

Furnishings, decorative finishes, specialty plumbing and electrical, and exterior improvements. A large share of an STR’s basis sits in short-life components.

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Mobile home park

$4,840,7501st-year tax savings

Purchase price: $6.7M

Land improvements dominate: pads, roads, utility distribution, lighting and site work to 15-year property that a straight-line schedule leaves on a 27.5-year clock.

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Hotel

$6,127,6981st-year tax savings

Newly constructed: $22M

Guest-room finishes, FF&E, commercial kitchen and laundry equipment, pools and site improvements are among the richest reclassifications of any property type.

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Industrial

$963,9061st-year tax savings

Purchase price: $4.2M

Process-related electrical, compressed air, specialty foundations, cranes and yard improvements separate from the building shell and depreciate far faster.

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