- Kitchen equipment hookups
- Specialty electrical & plumbing
- Flooring, cabinets & finishes
How a Fast-Food Restaurant in Manning, SC Unlocked a $1.33M First-Year Deduction
The owner bought a $2.56M restaurant expecting to write it off slowly over 39 years. A cost segregation study let them deduct $1.33M of it in the very first year instead.
The Results
Deducted in year one
$1.33M
vs. just $36,741 without a study — a 36× larger first-year write-off.
$2.56M
total purchase price (building + land)
57.3%
of the building moved to faster 5- and 15-year schedules
$1.43M
total deductions projected over the first 5 years
Where the $2.29M building value landed
The $270,000 land value is excluded — land can't be depreciated.
Moved to faster schedules: $1,313,673
$664,6055-year property
$649,06815-year property
$978,963Stays on the 39-year schedule
Why $1.33M and not $1.31M? The year-one deduction also includes about $15.7K of normal first-year depreciation on the $978,963 that stays on the 39-year schedule.
First-year deduction: before vs. after
Cash now, not later. Deductions that would have trickled in over decades arrive in year one.
Bonus eligible. The faster-schedule parts qualified for up to 100% bonus depreciation.
Audit-ready. Every classification is backed by an on-site inspection and cost analysis.
The Property
A single-tenant, one-story fast-food restaurant built in 1983, acquired in 2023 and placed in service May 1, 2026.
LocationManning, SC
Size2,849 sq. ft.
Building value$2,292,636
+ Land value$270,000
= Total purchase price$2,562,636
Only the building value can be depreciated; land can’t.
The Challenge
Without a study, the full $2.29M building value would be written off evenly over 39 years. That meant only about $36,741 in deductions the first year — with the rest trickling in until the 2060s. The owner wanted to know which parts of the restaurant could be written off faster, backed by documentation that would hold up if the IRS ever asked.
The Solution
Engineered Tax Services (ETS) sent engineers to the restaurant and reviewed it piece by piece — equipment connections, specialty electrical, finishes and outdoor improvements — rather than applying a rough percentage.
Inspect
On-site visit to document every component
Price each part
Engineering cost estimates for every component
Sort & verify
Assign each part to a 5-, 15- or 39-year schedule and check it all adds up
The Takeaway
Even a small, 40-year-old restaurant can hide seven figures in faster write-offs. Treating a property as one big asset leaves money on the table for decades; a cost segregation study puts it back in the owner’s hands in year one.
Figures are deductions reported in the engineering study, not guaranteed dollar-for-dollar tax savings. Actual savings depend on each taxpayer’s situation.
Could your property qualify for faster write-offs?
Find out what a cost segregation study could uncover for your restaurant or commercial building.
Cost segregation in 60 seconds
A building isn't one thing — so it shouldn't be written off like one.
When you buy commercial property, the IRS lets you deduct its cost over time (that’s depreciation). By default, the whole building is spread over 39 years — a small deduction each year.
But many parts of a building wear out much faster than its walls and roof. A cost segregation study is an engineering review that finds those parts and moves them to shorter 5- or 15-year schedules. With bonus depreciation, those faster pieces can often be deducted all at once, in year one.
- Parking lot & drive-thru paving
- Landscaping & site lighting
- Signage & outdoor improvements
- Foundation & structure
- Walls & roof
- Core building systems
Typical examples for restaurant properties. Exact classifications are determined by the engineering study.