Case Study: Cost Segregation Analysis for a Medical Facility in Brattleboro, VT

brattleboro medical facility


In 2022, the owners of a medical facility in Brattleboro, VT, sought to optimize their tax savings through strategic tax planning. The property consists of a single two-story building encompassing 5,830 square feet. The medical facility features modern amenities and specialized equipment to cater to its operations.

The building’s exterior includes durable materials and large windows, while the interior is equipped with high-efficiency HVAC systems, water heaters, and contemporary lighting fixtures. The property also includes various site improvements such as parking spaces, landscaping, and utility connections.

The owners engaged Engineered Tax Services (ETS) to perform a comprehensive cost segregation study of the property. This study aimed to identify and reclassify specific assets, enabling the acceleration of depreciation and optimizing tax benefits. This case study outlines the cost segregation strategy employed and its significant impact on the financial outlook of the property.


The primary objective of the cost segregation study was to identify and classify the medical facility's assets to optimize the owners' tax savings. By breaking down and reallocating components into shorter depreciation life categories, ETS aimed to provide both immediate and long-term financial benefits through accelerated depreciation.


ETS employed a detailed, engineering-based approach, which included:

  1. Physical Inspection: conducting a thorough site visit to identify and photograph the property's components
  2. Document Review: examining architectural plans, construction documents and accounting records
  3. Cost Analysis: applying engineering principles to allocate costs to specific asset classifications
  4. Depreciation Calculation: calculating depreciation using IRS-accepted methods such as the Modified Accelerated Cost Recovery System (MACRS)

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Asset Allocation

5-Year Class Life

Total Depreciation Allocation: $91,493.29
Percentage of Total Depreciable Basis: 26.68%

5-year class life assets identified in this study include:

  • Electrical systems (specialized equipment)
  • Appliances (refrigerators, dishwashers, ice machines)
  • Furniture and fixtures (cabinets, shelving, mirrors, counters)
  • Interior finishes (flooring, ceiling fans, decorative wall treatments)
  • Communication and security systems (telephone connections, key card readers, security cameras)

15-Year Class Life

Total Depreciation Allocation: $34,465.41
Percentage of Total Depreciable Basis: 10.05%

15-year class life assets identified in this study include:

  • Land improvements (parking spaces, sidewalks, fences, landscaping)
  • Recreational facilities (pool, pool deck)
  • Site utilities and infrastructure (site lighting, signage, utility sinks)

39-Year Class Life

Total Depreciation Allocation: $216,993.87
Percentage of Total Depreciable Basis: 63.27%

39-year class life assets identified in this study include:

  • Structural components (walls, doors, windows, roofing)
  • Building systems (HVAC, plumbing, electrical distribution)
  • Permanent fixtures (restroom fixtures, emergency lighting, signage)
  • Interior construction (drywall partitions, flooring, ceilings)

Class Life Details:


The cost segregation study for this medical facility in Brattleboro, VT demonstrates the substantial financial advantages of strategic tax planning. By reclassifying property components into shorter depreciation categories, the study enabled accelerated depreciation, resulting in maximized tax savings and improved cashflow. This approach not only enhanced the medical facility's profitability but also allowed for more efficient capital management and future property upgrades. The case study illustrates how cost segregation can significantly boost the financial performance of real estate investments.

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