Commercial · 39-year property
Cost Segregation for Hotels and Hospitality Property
A hotel is three buildings stacked into one: a guest-room block, a food and beverage operation and a public amenity floor. Each reclassifies differently, and all three reclassify well.
Guest rooms are full of five-year property
Casegoods, headboards, decorative lighting, carpet and vinyl plank, wall vinyl, window treatments, bath accessories, in-room refrigeration, PTAC power drops and low-voltage cabling are personal property. Multiply a modest per-key number by 120 keys and the category is significant on its own.
Amenities and site
Add the restaurant or breakfast area — which carries the same kitchen profile as a standalone restaurant — plus pool equipment and decking, fitness rooms, meeting-space AV and decorative lighting, porte-cochère structures, signage, and a parking field sized for full occupancy. Renovation cycles matter as well: franchise property improvement plans generate qualified improvement property and partial asset disposition opportunities on the components being replaced.
Component takeoff
What we pull out of hotels & hospitality
Grouped by the recovery period each component lands on. This is representative, not exhaustive — the takeoff on your building will be longer.
- 5Guest-room casegoods, headboards and affixed millwork
- 5Decorative lighting, lamps and accent fixtures throughout
- 5Carpet, luxury vinyl, wall vinyl and window treatments
- 5PTAC and fan-coil power drops and dedicated circuits
- 5Low-voltage, guest Wi-Fi, television and door-lock systems
- 5Kitchen hoods, refrigeration, gas and equipment power
- 5Bar, front-desk and back-of-house millwork
- 5Pool and spa equipment, heaters, pumps and controls
- 5Fitness equipment, AV systems and meeting-room technology
- 5Interior and exterior signage and canopies
- 7Loose guest-room and public-area furniture
- 7Housekeeping and operations equipment
- 15Parking areas, drives, porte-cochère paving and curbing
- 15Pool decking, hardscape, patios and outdoor kitchens
- 15Site lighting, landscape lighting and monument signage
- 15Landscaping, irrigation, water features and screening
- 15Storm drainage, retaining walls and site utilities
- 15Qualified improvement property from PIP renovations
- 39Structure, foundations, exterior envelope and roof
- 39Elevators, stairs and life-safety systems
- 39Central plant HVAC, domestic water and sprinkler mains
Questions
How much of the basis usually reclassifies on this property type?
Studies on hotels & hospitality typically move 24% to 38% of depreciable basis into 5, 7 and 15-year classes. That is a planning range from comparable buildings, not a promise — the number that ends up on your return comes from the actual takeoff.
What documents do you need?
The closing statement, the current depreciation schedule and the property address at minimum. Construction records, drawings, pay applications and change orders make the work more precise and often cheaper.
I bought this several years ago. Is it too late?
No. As long as you still own it and placed it in service after 1986, a look-back study captures every missed deduction and brings it forward on the current return via Form 3115. No amended returns.
Related
Other property types
The study is one piece. We can handle the rest of the return.
Deprecio is part of the Shurek Accounting & Tax family of brands. If you want the study and the tax work under one roof — the return, the Form 3115, entity structure, quarterly estimates, multi-state filings — that is a single engagement, not a hand-off between two firms.
No-cost feasibility review
Find out what your building is hiding.
A feasibility review is free and takes about twenty minutes. Bring the closing statement and the depreciation schedule; we will tell you plainly whether a study pays for itself.