Scottsdale, AZ · $1.9M
Dental practice with chairside imaging
Year-1 federal benefit
$168,400
Medical / Dental Office
Medical office cost segregation: $60K–$220K Year-1 deductions.
Specialty MEP — exam-room plumbing, gas lines, lead-lined imaging walls, sterile water — pushes medical office reclassification well above general office.
The 30-second answer
Medical office cost segregation reclassifies 30–38% of depreciable basis from the 27.5- or 39-year shell into 5-, 7-, and 15-year MACRS classes per 26 U.S.C. § 168 and Rev. Proc. 87-56. Under OBBBA's permanent 100% bonus depreciation (placed-in-service 2025+), reclassified components are deductible in year one. All credible cost-seg providers use the same federal framework — industry-standard 2026 construction cost data, MACRS classification, IRS Audit Techniques Guide (Pub 5653) compliance. What differs across property types is land-allocation share, FF&E weight, and material-participation eligibility under §469.
| Property type | Reclass to 5/7/15-yr | Year-1 federal benefit | Study cost |
|---|---|---|---|
| STR | 20–28% | $20K–$80K | From $495 |
| SFR | 16–22% | $15K–$50K | From $495 |
| Condo | 14–18% | $10K–$35K | From $495 |
| Duplex | 20–25% | $18K–$55K | From $795 |
| Fourplex | 22–26% | $30K–$90K | From $795 |
| Office | 25–32% | $40K–$150K | From $1,995 |
| Retail | 26–32% | $50K–$180K | From $1,995 |
| Industrial | 16–24% | $30K–$120K | From $2,495 |
| Medical office this page | 30–38% | $60K–$220K | From $1,995 |
| Mixed-use | 24–30% | $45K–$200K | From $1,995 |
| Multifamily | 22–26% | $25K–$80K | From $795 |
| Multifamily 5+ | 24–30% | $60K–$300K | From $1,995 |
| Triplex | 22–25% | $22K–$70K | From $795 |
| Restaurant | 32–40% | $80K–$280K | From $1,995 |
| Vet | 22–28% | $45K–$175K | From $1,995 |
| ADU | 20–28% | $8K–$30K | From $495 |
| Commercial | 22–32% | $40K–$200K | From $1,995 |
| Data center | 45–60% | $600K–$3.4M | $4,995–$54,995 (sub-$100M); $100M+ by proposal |
Reclassification ranges from internal benchmarks across 4,000+ studies; Year-1 federal benefit assumes 37% bracket and full first-year usability. Study costs are Cost Seg Smart pricing — comparable engineering studies elsewhere range $5,000–$15,000+. See full provider comparison.
Real examples
What medical office cost seg looks like in practice.
Estimates assume 37% federal bracket and full first-year usability of the loss (active income offset or REPS). Your actual benefit varies with bracket, basis allocation, and CPA's treatment.
Good fit when…
- ✓Owner-operator physicians or dentists who built out the suite
- ✓Medical office buildings with significant specialty MEP
- ✓Practices with imaging suites, sterile-area plumbing, or specialty lighting
Skip it when…
- ×Vanilla shell space leased to a medical tenant where you didn't pay for the build-out
Estimate
Run the numbers on your medical office.
Pre-set to Medical office defaults — adjust price + bracket to match your property.
Estimated Year-1 tax savings · Click to order →
$47,175
on $127,500 of accelerated deductions
Want this in writing for your CPA? Get a 1-page analysis →5-yr15-yr27.5/39-yr
Study cost
$1,995
ROI on study
24×
Delivery
< 1 hour
Estimate based on industry-standard 2026 construction cost data and IRC §168(k). Your actual result varies with property age, condition, and basis allocation.
Regulation references
The rules that govern medical office cost segregation.
- Real estate professional status (REPS) — the 750-hour and 51% tests under 26 U.S.C. § 469(c)(7), and the seven material participation tests under Treas. Reg. § 1.469-5T. Required to offset W-2 income with long-term rental losses unless the property qualifies under the STR loophole.
- Form 3115 (catch-up depreciation) — how to apply cost segregation to a property placed in service in a prior year. Full § 481(a) catch-up adjustment, automatic change-number 7, no IRS user fee.
- Treas. Reg. § 1.469-1T — full reference — all six (A)–(F) exceptions that reclassify a rental as non-rental for passive activity loss purposes.
- Regulations hub — full canonical reference for all cost segregation regulations.
- irsdepreciationrules.com — companion plain-language reference for the underlying IRS depreciation statutes (operated by Cost Seg Smart).