Austin, TX · $1.2M
5,000 SF animal hospital — surgical suite + kennel wing
Year-1 federal benefit
$86,800
Veterinary Clinic / Animal Hospital
Vet cost segregation: $85K–$540K Year-1 deductions.
A veterinary hospital is a building wrapped around surgical suites, kennels, imaging rooms, and a wet lab — one of the densest clinical fit-outs in commercial real estate, and most of it is mis-parked on the 39-year schedule.
The 30-second answer
Veterinary cost segregation is an engineering-based study that reclassifies a clinic or animal hospital's components out of the default 39-year commercial schedule into faster 5-, 7-, and 15-year MACRS classes. It fits practice owners who bought, built, or built out their clinic, because a veterinary fit-out — exam casework, surgical oxygen and anesthesia, imaging power, removable kennels and runs, in-house lab, and specialty floor drainage — is unusually dense with short-lived property. That matters because, with 100% bonus depreciation, the reclassified amount (about 19–36% of building basis, and ~37% when practice equipment is documented) is deductible in Year 1.
Vet cost segregation reclassifies 19–36% 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 — 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. 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 | 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 this page | 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 vet 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…
- ✓Owners who bought or built a clinic and depreciate it over 39 years
- ✓Practice acquisitions where imaging, surgical, lab, or kennel equipment conveyed (documented → observed 5/7-yr)
- ✓Tenants who funded their own clinical build-out in a leased space
Skip it when…
- ×Vanilla-shell leases where the landlord funded the entire build-out
- ×Build-out or building basis under ~$400K, where the study fee gets thin against the benefit
Estimate
Run the numbers on your vet.
Pre-set to Vet defaults — adjust price + bracket to match your property.
Estimated Year-1 tax savings · Click to order →
$26,025
on $70,337 of accelerated deductions (Year 1, beyond straight-line)
typical $21,915–$39,722
Want this in writing for your CPA? Get a 1-page analysis →5-yr15-yr27.5/39-yr
Study cost
$1,495
ROI on study
17×
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 industry-standard 2026 construction cost data and IRC §168(k). Your actual result varies with property age, condition, and basis allocation.
Frequently asked
Vet cost segregation, by question.
Do veterinary clinics qualify for cost segregation?
Yes. Any practice that owns its building or its build-out can reclassify the clinical fit-out — exam and treatment casework, surgical oxygen/anesthesia, imaging power, kennels and runs, in-house lab casework, and animal-facility floor drainage — out of the 39-year schedule into 5-, 7-, and 15-year classes. A typical clinic reclassifies 19–36% of building basis, and more when practice equipment is documented.
How much does a veterinary cost segregation study cost?
Veterinary clinics are priced on the specialty-commercial ladder: from $2,995 for sub-$1M basis, $4,995 for a typical $1M–$3M clinic, delivered as a CPA-ready PDF, within 1–2 business days. Remote for most residential and small-commercial studies; on-site observation for larger commercial projects.
I lease and paid for my own build-out — does it still apply?
Yes. A tenant who funded the build-out depreciates that investment, and a veterinary build-out is dense with reclassifiable clinical infrastructure. The study runs on your build-out basis and is reviewed before delivery so the classification matches how the improvements were funded.
I bought my practice 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 vet cost segregation.
- Cost Segregation for Veterinary Clinics: 2026 Guide with Real Numbers — our in-depth guide to vet 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).
Want your own numbers instead?
Get a free 1-page preliminary depreciation estimate for your property — we do the work, you get the PDF.
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