Most property owners think of their building as an expense. Tom Brodie, National Account Executive with CSSI – Cost Segregation Services, sees it differently: for many owners, the building is also a source of cash flow they haven’t tapped yet. In this podcast appearance, Tom explains how cost segregation and bonus depreciation work together to unlock it.
Where the Hidden Cash Flow Comes From
Every dollar you deduct lowers your taxable income, and every dollar of tax you don’t pay this year stays in your business. The question is when you get those deductions. Standard depreciation spreads a commercial building over 39 years (27.5 for residential rentals), so most of the benefit arrives decades later.
Step One: Cost Segregation
A cost segregation study is an engineering-based analysis that breaks your property into its components. Items like certain electrical, flooring, cabinetry, fixtures, parking areas and landscaping are reclassified into 5, 7 and 15-year schedules instead of 39.
Step Two: Bonus Depreciation
Once those shorter-life components are identified, many of them can qualify for bonus depreciation, which lets you deduct a large share of their cost in the first year.
The 2025 tax law (the One Big Beautiful Bill Act) permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025. Your CPA can confirm exactly how it applies to your situation.
What You Can Do With the Savings
- Reinvest in your business or your next property
- Pay down debt
- Build reserves for repairs and improvements
- Simply keep more of what you earn
If you’ve bought, built, expanded or renovated a property worth $200,000 or more in the last 15 years, you’re likely a candidate. Already own the building? Missed depreciation can often be caught up in the current year without amending prior returns, and the study fee is tax-deductible.
Example result: a retail strip center purchased in January 2020 for $5,555,041 (less land) produced a first-year tax savings benefit of $778,289. Results vary by property.
See What Your Building Could Save
Tom will run a free, no-obligation estimate on your property, so you’ll know what’s possible before you commit to anything.
Prefer to talk now? Call Tom at 713-906-3710.
I’m a two time Texas A&M graduate (BBA: 1981 & MBA: 2001) who worked for Shell Oil Company for 26 years. I learned the importance of communications – both verbal and written, as well as problem solving skills. With experience ranging from finding intra-company billing errors to defining customer requirements in global budgeting software to teaching people how to scuba dive and take pictures underwater. Tom Brodie Bio
