Data Wise - Cost Segregation Case Study: Florida Townhome Short-Term Rental (STR) – 2024 Bonus Depreciation
- Bob Montes
- May 30
- 2 min read
Escape Meets Investment
This luxury Florida townhome—with 6 bedrooms, 4.5 baths, and a private pool—offers guests a high-end vacation experience while delivering serious tax-saving potential for its owner.
Maximize Your Tax Savings with Engineered Cost Segregation
Project Overview
Property: Short-Term Rental (STR) Townhome
Location: Florida
Acquisition Price: $630,000
Size: 2,300 sq. ft.
Rooms: 6 Bedrooms, 4.5 Baths, Patio, Enclosed Pool
Placed in Service: 2024
Bonus Depreciation Rate: 60%
Key Financial Highlights
Metric | Value |
Total Accelerated Depreciation | $230,000 (36%) |
First-Year Depreciation | $157,000 |
Estimated First-Year Tax Savings | $54,950* |
First-Year Cash Flow | $58,000 |
*Assuming a 35% tax rate
About Our Study
Data Wise provided an engineered cost segregation study covering both acquisition and improvements. Our team reclassified significant portions of the building cost into shorter-life assets (5, 7, and 15-year classes) to accelerate depreciation and maximize tax savings, fully compliant with IRS guidelines.
Why Cost Segregation Matters for STRs
Short-term rentals that meet the IRS material participation requirements can offset active income with depreciation losses — a significant advantage over traditional long-term rentals.
By accelerating depreciation using a cost segregation study, investors improve cash flow by reducing taxable income in year one and beyond.
Data Wise Scope of Work
Utilized existing photo and video documentation (plus owner-supplied as needed)
Engineered cost segregation analysis of acquisition and improvements
Delivered audit-ready report with MACRS classifications by Property Unit and CSI format
Provided IRS audit support for IDR responses
About Our Report
Fully auditable and IRS-compliant
Includes detailed allocations by Property Unit and Schedule of Values
Supported by comprehensive work papers and documentation
Backed by a “substantial authority” tax opinion to minimize audit penalties
Data Wise retains all supporting documentation for defense in case of audit
Results at a Glance
Accelerated $230,000 of property cost into shorter depreciation lives
Created $157,000 of first-year depreciation expense
Generated approximately $54,950 in first-year tax savings (at 35% tax rate)
Delivered an estimated 10x ROI on the study cost
Ready to Discover Your Hidden Tax Savings?
Data Wise specializes in engineered cost segregation studies tailored for real estate investors seeking to maximize cash flow and reduce tax liability.
Contact us today to learn how we can help you unlock thousands in tax savings on your next acquisition.
© 2025 Data Wise | Cost Segregation Experts
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