Heather Fisher is a sales manager and Michael Royster a building incentives manager at Corporate Tax Advisors, a firm that works alongside CPAs to help owners use tax incentives such as cost segregation. Heather came from running a small animal practice in Alabama; Michael is a civil engineer who worked in welding, at NASA and in automotive manufacturing before a tax firm hired him. Between them they explain a decades-old tax tool that most building owners have never heard of, and how a 3D scan changes the way the study gets done.

Heather Fisher, Sales Manager, Corporate Tax Advisors & Michael Royster, Building Incentives Manager, Corporate Tax Advisors

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In this conversation

Heather on why cost segregation matters to almost anyone who owns a building and pays taxes on it.

Michael walks through a $10 million purchase and renovation, and where roughly $800,000 of cash benefit comes from.

The parts of a building that count as 5-year and 15-year assets, down to the wiring behind a decorative light fixture.

Why a client who bought a building in 2001 still got close to a million dollars of benefit for 2023.

How a 3D scan lets Michael check what was in a room without a second site visit, and defend the study if it is ever audited.

We're really taking money that you would be normally getting over 27 and a half years for residential or 39 years for industrial commercial buildings and we're bringing a portion of that forward so that you're able to then utilize that money today.

Heather Fisher

Chapters

An animal practice and an engineer

How a small business manager and a NASA engineer ended up at a tax firm.

Money that is already yours, sooner

What cost segregation does and who it is for.

By the numbers

How many years the IRS spreads depreciation over, by type of property

Nonresidential real property39

Residential rental property27.5

Land improvements15

5-year property5

Heather's whole argument sits in this gap: a study moves parts of a 39-year building into the 15-year and 5-year classes, so the deductions arrive decades earlier.

Source: IRS Publication 946, How To Depreciate Property (MACRS recovery periods) ↗

Why so few owners use it

Busy CPAs, a massive tax code, and a tool that has existed for decades.

By the numbers

Share of an eligible asset's cost that can be deducted in the first year (bonus depreciation)

Michael says bonus depreciation has been around since 2001 and people still don't know it. The rate has swung with nearly every tax bill since, which is one more reason owners need someone to tell them what applies this year.

Source: Forvis Mazars, Bonus Depreciation: Past, Present and Future (2026) ↗

Inside a cost segregation report

The 39-year shell, the 5-year upfit and the 15-year site work.

When a study is worth it

Buying, renovating, holding, or flipping, and the questions to ask first.

Scans and tax studies in one order

Why a 3D model of the building speeds up the study and strengthens it in an audit.

Let's just be honest, engineers and accountants, we're afraid of change.

Heather Fisher

Takeaways

A cost segregation study typically lets an owner deduct about 20 to 25 percent of a commercial building's value in the first year instead of over 39 years. Storage facilities, with climate control and roll-up doors, can reach 40 to 50 percent.

The best moment to ask is when you plan to buy, have just bought, or have just renovated. If you expect to sell within three to five years, it is probably not worth it because of recapture.

CPAs are focused on getting returns filed on time, so do not wait for them to raise it. Bring it to them, and ask for a free preliminary estimate before paying for a full study.

With having this 3D model, I'm like, oh, let me just go look at that room and see what's in there. Bam, there it is.

Heather Fisher