Specialty Equipment
Medical facilities rely on an array of advanced systems and equipment, many of which can be reclassified into 5-year property category. These include:
-
X-Ray & MRI Shielding Systems
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Specialty Surgical Lighting
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Built-in Exam Chair Systems
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Medical Gas Distribution Systems
Land and Structural Improvements
Many of the integral features of a medical office—often assumed to be part of the building structure—can be classified under 15-year property category, substantially increasing the available depreciation. Key qualifying assets include:
Patient Drop-Off Canopies & Driveways
Improve accessibility and qualify for accelerated depreciation.
Medical Waste Containment Areas
Secure storage for regulated disposal, classified as personal property.
Specialized Drainage & Plumbing
Engineered drainage and plumbing systems designed for biohazard waste management and infection control.
Sterile HVAC & Air Filtration Systems
Essential for infection control and eligible for accelerated depreciation.
Property Information
Property Type:
Location:
Size:
Purchase Price:
Purchase Date:
Tax Rate:
Bonus Depreciation:
Discount Rate:
Dentist Office
Atlanta, GA
7,000 sf
$2,175,492
5/19/23
45%
100%
6%
Reclassified Property | Percent | Amount |
|---|---|---|
5 Year Property | 23% | $503,346 |
15 Year Property | 19% | $401,197 |
39 Year Property | 58% | $1,270,049 |
Total Reclassified Property | 42% | $904,543 |
Study Findings
Cash Benefit | Cost Segregation | Straight Line |
|---|---|---|
1st Year Cash Benefit | $416,210 | $15,689 |
5 Year Accumulated CB | $467,025 | $102,669 |
10 Year Accumulated CB | $515,955 | $186,424 |
1st Year Depreciation | $924,911 | $34,864 |
5 Year Accumulated Dep. | $1,055,265 | $257,991 |
10 Year Accumulated Dep. | $1,218,207 | $536,900 |
Summary of Results
Total Reclassified Property:
First Year Deduction:
First Year Cash Benefit:
10 Year NPV:
$904,543 (42%)
$924,911
$416,210
$2,175,492
Medical Cost Segregation Case Study
Medical office buildings, with their advanced infrastructure and specialized systems, offer a significant opportunity for tax savings when analyzed with the right expertise.