The properties that benefit most from cost segregation are the ones where the building is really a container for equipment, specialty systems, and site work, because those are the dollars a study can legally move into 5-, 7-, and 15-year MACRS classes. The IRS Cost Segregation Audit Techniques Guide devotes separate industry chapters to restaurants, retail, casinos, and other asset types precisely because reclassification potential varies so much by use.
A practical ranking
As a general modeling rule, screening estimates tend to stack property types like this, from highest short-life share to lowest:
- Gas stations and car washes, where the retail motor fuels outlet rule in IRC section 168(e)(3)(E)(iii) can make the entire building 15-year property, and wash tunnels are mostly machinery
- Restaurants, with kitchen plumbing, grease systems, hood ventilation, dedicated electrical, and dense finishes
- Medical and dental offices, where operatory plumbing, medical gas, shielding, and equipment-driven electrical reclassify
- Hotels, heavy in finishes, casework, and guest-facing systems
- Data centers, truck repair, and daycare facilities, each loaded with specialty power, plumbing, or play-yard site work
- Self-storage and other site-heavy assets, where paving, fencing, and lighting dominate
- Multifamily, a steady middle case with unit finishes, appliances, and land improvements
- Basic office, retail shell, and warehouse, where most cost is structure
The high end of that list often sees 25 to 40 percent of depreciable basis reclassified in screening models; plain shells can land under 15 percent. These are modeling ranges, not promises; the split for any one property depends on its construction detail and purchase price allocation.
Why the same dollars behave differently
Compare 2 purchases with $2,000,000 of depreciable basis each, acquired after January 19, 2025 so 100 percent bonus applies under IRC section 168(k) as amended by OBBBA. A freestanding restaurant whose study moves 35 percent, $700,000, into short-life classes can deduct that $700,000 in year 1 on top of regular depreciation on the rest. A warehouse that moves 12 percent, $240,000, gets a real but much smaller acceleration. Same price, same law, very different first-year outcome, entirely because of what the buildings contain.
What matters more than property type
Type is only the starting filter. A high land allocation shrinks the depreciable base no matter how equipment-rich the building is. Your ability to use the losses, passive activity limits under section 469, real estate professional status, or the short-term rental tests, determines whether the deduction lands this year or suspends. And holding period matters, since short-life property recaptured under section 1245 at sale can claw back benefit on a quick flip.
Amadae's cost segregation screen exists for exactly this triage: it produces a screening estimate of the reclassification share and first-year benefit for a specific property, so you only commission an engineering study, which Amadae coordinates but does not perform, when the numbers justify it.