White Paper • Cost Segregation
Cost Segregation for Industrial & Light Manufacturing Owners
How accelerated depreciation supports cash flow, capital planning, and long-term strategy.
Cost segregation is one of the most consistently underutilized federal tax strategies available to manufacturing and industrial facility owners, particularly those who acquired, expanded, or substantially renovated assets in the last five years. This white paper breaks down the mechanics, the math, and the market realities that determine how much you’re leaving behind.
5, 7, or 15
Compressed Years to Depreciate
Compared to standard 39 year depreciation schedule
6 – 7
Figures of Cash Flow
Typical benefit range for qualifying commercial properties
10 – 15
Year Retroactive Lookback Window
Studies can be completed on properties acquired or built in the last 10-15 years
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What's Inside
The Mechanics of Cost Segregation for Industrial Assets
How the IRS classification system works, what qualifies as 5-, 7-, or 15-year property in a manufacturing context, and where engineers and CPAs diverge on reclassification methodology.
Bonus Depreciation Interaction & Phase-Down Rules
The 2023 – 2026 phase-down schedule and what it means for the sequencing of your study, including why delaying is a quantifiable dollar cost, not an abstract risk.
Texas & Sunbelt Market-Specific Considerations
State depreciation conformity, local ad valorem interplay, and why a cost segregation study completed without awareness of your county assessor’s methodology may actually hurt your appeal position.
Retroactive Opportunities: The Look-Back Election
How the IRS allows you to claim missed depreciation from prior years – without amending returns – and the asset acquisition timeline that determines your eligibility window.
Integrated Tax Strategy
Why manufacturing and industrial owners with multiple tax exposures are best served by a coordinated strategy across cost segregation, ad valorem, and sales tax, and the specific interaction effects that a siloed approach misses.
Case Study & ROI Benchmarks
Real results across Texas, Georgia, and Florida industrial portfolios, including realized tax deferrals, NPV calculations, and timelines from engagement to delivery.
KE Andrews operates at the intersection of engineering-level asset analysis and tax strategy, not as generalists, but as nationwide practitioners who specialize in the asset classes and jurisdictions where it matters most. Our Cost Segregation practice is integrated with our ad valorem, sales and use tax, and credits and incentives work, which means we identify opportunities that a standalone cost segregation firm simply won’t see.