Dallas, TX · $3.0M
Drive-up facility, extensive paved drive aisles
Year-1 federal benefit
$116,600
Self-Storage Facility
Self-storage cost segregation: $75K–$1.6M Year-1 deductions.
A self-storage facility is a cheap shell on heavy site work: paved drive aisles, perimeter fencing, site lighting, and security systems reclassify out of the 39-year schedule, while the roll-up unit doors stay with the building.
The 30-second answer
Self-storage cost segregation is an engineering-based study that reclassifies a storage facility's components out of the default 39-year commercial schedule into faster 5-, 7-, and 15-year MACRS classes. A self-storage facility is a low-cost shell sitting on heavy site work, so the site work carries the study: the paved drive aisles, aprons, perimeter fencing and gates, and site lighting are 15-year land improvements and by far the largest bucket, because a drive-up facility sits on two to three times its footprint in paving. A smaller 5-year layer comes from the security, keypad, camera, and gate-access systems. The roll-up unit doors are building doors under the IRS Cost Segregation Audit Techniques Guide and generally stay 39-year; only a motorized door operator, when present, is 5-year. With 100% bonus depreciation the reclassified amount (about 10–36% of building basis, more on a paving-heavy drive-up facility) is deductible in Year 1. Climate-control HVAC is captured when present.
Self-storage cost segregation reclassifies 10–36% 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 — public government 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. For the general explanation, see what a cost segregation study is and what the report contains.
| Property type | Reclass to 5/7/15-yr | Year-1 federal benefit | Study cost |
|---|---|---|---|
| STR | 19–39% | $45K–$280K | From $495 |
| SFR | 8–32% | $16K–$165K | From $495 |
| Condo | 10–19% | $18K–$76K | From $495 |
| Brownstone | 5–20% | $60K–$640K | From $495 |
| Rowhouse | 5–18% | $10K–$170K | From $495 |
| Duplex | 8–21% | $19K–$105K | From $995 |
| Fourplex | 14–29% | $56K–$230K | From $995 |
| Office | 16–29% | $84K–$650K | From $995 |
| Retail | 20–37% | $90K–$690K | From $995 |
| Industrial | 15–28% | $78K–$840K | From $2,495 |
| Self-storage this page | 10–36% | $75K–$1.6M | From $2,495 |
| Medical office | 16–29% | $84K–$540K | From $2,995 |
| Mixed-use | 12–23% | $63K–$515K | From $995 |
| Multifamily | 14–28% | $44K–$200K | From $995 |
| Multifamily 5+ | 14–26% | $110K–$1.0M | From $1,995 |
| Triplex | 8–26% | $25K–$165K | From $995 |
| Restaurant | 16–29% | $72K–$430K | From $2,995 |
| Vet | 19–36% | $85K–$540K | From $2,995 |
| Gym | 21–40% | $110K–$900K | From $2,995 |
| Dealership | 25–47% | $465K–$4.2M | From $2,995 |
| ADU | 7–14% | $8K–$39K | From $495 |
| Commercial | 18–34% | $94K–$765K | From $995 |
| Data center | 43–65% | $2.5M–$29M | $4,995–$54,995 (sub-$100M); $100M+ by proposal |
| Senior living | 21–39% | $315K–$2.3M | By proposal |
| Funeral homes | 18–30% | $135K–$900K | By proposal |
| Child day care | 15–28% | $56K–$630K | From $2,995 |
| Adult day care | 14–26% | $78K–$780K | From $2,995 |
| Church | 10–22% | $37K–$825K | From $2,995 |
| Farm | 8–65%† | $19K–$780K | From $995 |
Reclassification ranges from the bands we publish per property type (measured on our delivered studies where we have enough of a type, modeled elsewhere); 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+. The ADU figure is an ADU acquired with a house; one the owner built or converted is priced on its documented construction cost, from $995. See full provider comparison.
† Farm: the figure is property with a recovery period of 20 years or less, on a farm with one or more rental houses on it. It counts 10- and 20-year property, which no other row has, and its dollar figure is a first-year deduction, not tax saved. A farm is quoted from a list of what is on it; see how.
Worked examples · modeled
What self-storage cost seg looks like in practice.
Illustrative, modeled properties, not client engagements. 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…
- ✓Drive-up facilities with extensive paved drive aisles and perimeter fencing
- ✓Climate-controlled facilities with dedicated HVAC serving the units
- ✓Owners with a basis of at least ~$1M and facility income the deduction can reduce
Skip it when…
- ×Bare land or a facility still under construction with no completed site work
- ×Portfolios above $15M — scoped per-engagement by proposal
Estimate
Run the numbers on your self-storage.
Pre-set to Self-storage defaults — adjust price + bracket to match your property.
Estimated Year-1 tax savings · Click to order →
$24,655
on $66,635 of accelerated deductions (Year 1, beyond straight-line)
typical $20,546–$38,352
Want this in writing for your CPA? Get a 1-page analysis →5-yr15-yr27.5/39-yr
Study cost
$2,495
ROI on study
10×
Delivery
1–2 business days
Your study includes more than the report.
- Engineering-based, property-specific analysis
- Direct coordination with your CPA
- Free revisions for 12 months; corrections of our errors always free
- Renovation analysis under $100,000 included
- Lifetime written audit support
- CPA-ready depreciation schedules and Excel fixed-asset file
Everything included in your study fee. Form 3115 preparation available separately.
Estimate based on public government construction cost data and IRC §168(k). Your actual result varies with property age, condition, and basis allocation.
Frequently asked
Self-storage cost segregation, by question.
Do self-storage facilities qualify for cost segregation?
Yes. A self-storage facility is a low-cost shell on heavy site work, so it reclassifies well: the paved drive aisles, perimeter fencing and gates, and site lighting are 15-year land improvements (by far the largest bucket), and the security and access-control systems are 5-year personal property. The roll-up unit doors generally stay with the 39-year building. A typical facility reclassifies roughly 10–36% of basis, more on a paving-heavy drive-up site.
Are roll-up storage unit doors 5-year property?
Generally no. The IRS Cost Segregation Audit Techniques Guide files overhead and roll-up doors under Doors, as part of the building, so the unit doors are typically 39-year Section 1250 property even though a drive-up facility has hundreds of them. The exception is a motorized door operator: where the units have powered openers and controls, that operator equipment (a modest share of the door assembly) can be 5-year personal property, and the study includes it only when the facility actually has it.
Are the drive aisles and paving 15-year property?
Yes. The paved drive aisles, aprons and loading lanes, perimeter fencing, gates and bollards, and site lighting are 15-year land improvements, not the 39-year period of the building. Because a drive-up facility sits on two to three times its footprint in paving, this site work is usually the single largest reclassification in a self-storage study.
How much does a self-storage cost segregation study cost?
Self-storage facilities have their own pricing tier by value: from $2,495 for a sub-$1M facility, $5,995 for a $2M–$4M facility, and $7,995 for a $4M–$7M facility, delivered as a CPA-ready PDF, within 1–2 business days. Portfolios above $15M are scoped per-engagement.
I bought my facility years ago — is it too late?
No. A lookback study lets you claim missed depreciation via Form 3115 on your current-year return under the IRS automatic-consent procedures, with no amended returns. The cumulative catch-up flows through in a single year.
Regulation references
The rules that govern self-storage cost segregation.
- Cost Segregation for Self-Storage Facilities: 2026 Guide — our in-depth guide to self-storage 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).
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