Why hotels and hospitality assets reclassify well in Texas
Texas has no state income tax and is the largest U.S. state for new commercial construction. Heavy industrial, multifamily, energy-sector, and hospitality activity make it the largest single state for cost segregation engagements.
Hotels & Hospitality properties have a particular profile that makes cost segregation especially valuable: FF&E, decorative finishes, kitchen and pool systems — the highest-yielding category. The shell sits on a 39-year recovery period under MACRS — but every hotels & hospitality is hundreds of components, many of which qualify for 5-, 7-, or 15-year recovery and accelerated bonus depreciation.
Typical reclassification ratio
For a hotels & hospitality in Texas, TDA studies typically reclassify 32–40% of depreciable basis. Combined with 100% OBBBA bonus depreciation on property acquired and placed in service after January 19, 2025, that translates the entire reclassified amount into a year-one deduction.
Texas markets we serve
We deliver hotels & hospitality cost segregation studies across Texas, including Houston, San Antonio, Dallas, Austin, Fort Worth. Engineering-based methodology and RSMeans cost data on every engagement.