cost segregation services
cost segregation services
cost segregation services

Cost Segregation for
Hotels and Motels

By using cost segregation for hotel and motel buildings, you’re freeing
up income in the first few years of ownership, often when
investors are breaking even.

Get a free projection

How a Cost Segregation Study Works for Hotels

Using a Cost Segregation Study for hotel and motel properties allows owners to free up income earlier in their depreciation schedule.
With a cost segregation study, owners can depreciate certain assets in their hotel or motel property quicker than the typical 39-year straight-line method.
Some assets eligible for cost segregation include guest room assets, hospitality fixtures, food service areas, laundry systems, exterior improvements, parking, signage, and amenities.  Any asset that does not compromise the structural integrity of the hotel or motel property can be fully depreciated over 5, 7, or 15 years.
Standard: 27.5–39 yrs
Cost seg: 5 · 7 · 15 yrs

Get a Free Projection for cost segregation from our team of cost segregation experts.

How to Tell if Your Property Qualifies For A Cost Segregation Study

Hotel and motel building owners may qualify for a cost segregation study if they have done any of the following after 1985:

  • Purchased a hotel or motel
  • Renovated an existing property
  • Expanded an existing property
  • Planning a future 1031 exchange
  • Constructed a new hotel or motel property
  • Restored an existing property
  • Paid for leasehold improvements
  • Received a property as a gift

The strongest candidates for a cost segregation study are owners who have spent over $1 million on the property or over $100,000 in improvements. If you fall into this category, the benefits will greatly outweigh the cost.

Contact us for a free projection from our cost segregation experts.

How Do You Benefit From a Cost Segregation Study for Your Hotel or Motel Property?

By accelerating depreciation on certain building assets, owners of hotel and motel properties can realize significant tax benefits many years sooner and maximize the value of their investments.

  • Increased cash flow
  • Substantial catch-up depreciation
  • Secure IRS audit protection
  • Verified depreciation schedules
  • Large income tax deferrals
  • Bonus depreciation qualifications
  • Suite-by-suite cost breakdowns
  • Peace of mind knowing your depreciation method is correct
Cost Segregation Calculator

How much could you save on your hotel or motel?

Enter your property's cost basis below to see your projected tax savings based on NCSS completed studies.

Estimate your projected savings
Cost basis$5,000,000
$1M$50M
Total projected tax savings
$192,400

Projections are based on NCSS historical study data and assume a 37% federal tax rate. Individual results may vary.

What that includes

  • ✓Ongoing IRS audit protection on every study, for life.
  • ✓A custom-tailored, engineering-based cost segregation study from experts.
  • ✓A guarantee of a minimum 5x return on your investment.
  • ✓Free unlimited projections for life, any property, anywhere in the nation.
Get a free projection

Does a cost segregation study for hotel and motels change by state?

At National Cost Segregation Services, we are proud that our expertise serves every region of the U.S. A cost segregation study for hotel and motel properties identifies assets that may be eligible for a shorter depreciation schedule under the IRS guidelines. A cost segregation study is based on federal tax law, which means it’s applicable in any state.

While the method of cost segregation is the same state by state, the result varies. Some states follow the exact federal depreciation rules, while others limit or adjust certain deductions. This means one hotel or motel owner may see one result on their federal tax return and a different result on their state return.

Because National Cost Segregation Services works with hotel and motel property owners across the country, our studies are designed to support the federal depreciation strategy while providing your CPA with the detailed information needed to evaluate any state-level adjustments.

Do you have a question about what a cost segregation study looks like in your state? Talk to our cost segregation experts, and get a free projection.

Cost Segregation Case Study

Utah · Multifamily apartments

A multifamily property reclassified a significant share of its basis into 5-, 7-, and 15-year assets, accelerating first-year deductions and freeing up cash flow early in the hold.

See the full case study…

Industries that benefit from cost segregation

Short Term Vacation Rental
Drug stores
Child Care Centers
Mobile home parks
Golf courses
Banks
Self-storage
Industrial / warehouse
Office buildings
Medical & dental
Restaurants
Hotels & motels
Multifamily

100% bonus depreciation is now permanent

The 2025 One Big Beautiful Bill Act permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025. Components with a depreciable life of 20 years or less may now be written off entirely in year one, not just for a single tax year, but going forward.

Cost Segregation Multiplied for Every Room

During a cost segregation study, a hotel or motel has eligible assets across every guest room. Hotels and motels are unique because the depreciation opportunity is repeated across every room. A single guest room may include flooring, lighting, window treatments, furniture, vanities, mirrors, mini fridges, microwaves, coffee stations, specialty electrical, and other assets that could and should be reviewed separately from the main building structure. 
If the owner does not do a cost segregation study, many of these assets may get grouped into the building depreciation. Meaning they don’t get fully depreciated until 39 years, as opposed to 5, 7, or 15 years.
A cost segregation study frees up income for the owners, which can help with expensive startup costs, renovations, property improvements, and maximizing that year’s return.
Get a free projection

The Five Guarantees of Cost Segregation Excellence at National Cost Segregation Services

  • We guarantee ongoing IRS audit protection on every study for life. If an IRS fine is issued due to any negligence on our part, we will pay the fine and give you $ 1,000.
  • We guarantee a quintuple return (5x) or more on your cost segregation study investment.
  • We guarantee a custom-tailored cost segregation study on your hotel or motel building. Our engineering-based study will be tailored exactly to your commercial property. No ‘cookie-cutter’ approach.
  •  We guarantee free unlimited projections for life. Any property in the nation.
  • We guarantee your Overall Satisfaction at the conclusion of your study, or we will make it right.

See what your property could save

Get a free projection from the nation’s leading cost segregation firm.

Get a free projection