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Direct representation, not advice from the sidelines.
Self storage cost segregation sorts your facility's cost by tax life. The land improvements and systems move to the shorter lives the code already assigns them: paving and fencing as 15-year land improvements, the rest sorted under the IRS Cost Segregation Audit Techniques Guide. 100% bonus depreciation is permanent for property acquired and placed in service after January 19, 2025, per Notice 2026-11, so that share is deductible in year one.
Cost segregation pays in proportion to how much of a property is short-life, and storage is mostly short-life.
Paving, drive aisles, fencing, and exterior lighting are 15-year land improvements, and a big slice of the total.
With almost no interior finish, more of a metal storage building's total cost sits in site work and systems a study can separate out. The load-bearing shell (foundation, walls, and roof) stays on the 39-year schedule. The site work and systems around it reclassify.
Gates, keypads, access control, and surveillance are personal property, not building.
Climate-controlled facilities reclassify an even larger share than drive-up sites. They carry HVAC, tighter electrical, and more access and monitoring systems, all short-life, on top of the same site work.
Dimov Tax runs the study and the return together, so the deduction is checked against your position before filing: passive or active, and what a sale does to recapture.
Purchase or construction costs and asset list, with each phase's placed-in-service date tracked.
Site work to 15 years, systems to their lives, the shell to 39, each tied to its authority.
Current-year, or a change in accounting method for a look-back.
Here is a hypothetical example involving a $2,000,000 self storage facility:
Every site is different. This is an illustration, not a quote; your actual figure is measured in the study.
The confident final returns... which include out of state rental properties.
The cost is based on its size and basis, one site or a portfolio, climate-controlled or drive-up, and whether it is current-year or look-back. We quote after a short look, and it runs a fraction of the first-year deduction it frees up.
The year-one deduction is a federal benefit. Some states, including California, do not conform to bonus depreciation, so your state result can be smaller and spread over a longer schedule.
The whole cost on one 39-year line means the short-life share was never separated.
Fresh basis with recent placed-in-service dates, the best raw material for 100% bonus.
A look-back claims the catch-up as a section 481(a) adjustment, per the Form 3115 instructions, no amended returns.
Accelerated depreciation comes back as recapture, so model it before you commit.
If two or three fit your facility, a study is likely worth running.
You do not need to know which parts qualify; that is the work. A short look at the site tells us whether enough reclassification is worth it, and if not, we will say so. Self storage cost segregation reaches only as far back as your records allow, so the deduction in the paving and the buildings does not wait forever.
Send the facility, its cost, and the date it went into service. We will tell you whether there is real deduction in the site work and buildings.
