cost segregation services
cost segregation services
cost segregation services

Cost Segregation for
Restaurants

By using cost segregation for restaurants, you’re freeing
up income in the first few years of ownership, often when
owners are breaking even.

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How a Cost Segregation Study Works for Restaurants

By using cost segregation for restaurant buildings, you’re freeing up income in the first few years of ownership, often when investors are breaking even. Cost segregation studies allow investors to break down the tax depreciation into parts.
Typically, investors can depreciate the cost of a restaurant over 27.5 years using the straight-line method.
But with a cost segregation study, you can depreciate certain parts of the restaurant more quickly. Some assets eligible for cost segregation include interior finishes, cabinetry, flooring, decorative lighting, specialty electrical, signage, parking, landscaping, and tenant improvement buildouts. 
Any asset that does not compromise the restaurant’s structural integrity can be fully depreciated over 5, 7, or 15 years.
Standard: 27.5–39 yrs
Cost seg: 5 · 7 · 15 yrs

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

Restaurant owners may qualify for a cost segregation study if they have done any of the following after 1985:

  • Purchased a restaurant
  • Renovated an existing property
  • Expanded an existing property
  • Planning a future 1031 exchange
  • Constructed a new restaurant
  • Restored an existing property
  • Paid for leasehold improvements
  • Received an restaurant 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.

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How Do You Benefit From a Cost Segregation Study for Your Restaurant Building?

By accelerating depreciation on certain building assets, owners of restaurant 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 restaurant property?

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

Estimate your projected savings
Cost basis$2,000,000
$500K$10M
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.
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Does a cost segregation study for restaurants 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 a restaurant property 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 restaurant 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 restaurant 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.

Can My CPA Do a Cost Segregation Study For Me?

A proper cost segregation study is a complex combination of tax law and engineering principles. Most accounting firms do not specialize in this area. This is exactly why our firm works so closely with your tax advisor to make the final application of a study a turnkey solution for you, the taxpayer. Our firm is approved by the IRS to perform cost segregation studies nationwide. Our approach is engineer-based, yielding the greatest tax benefits available to bank property owners. A completed Cost Segregation Study does not replace the important role an accountant plays in preparing tax documentation or determining tax liability, but adds to your comprehensive tax plan.

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.

Why Back-of-House Appliances for Restaurants Are a Big Opportunity For Cost Segregation Services

For many restaurant properties, the kitchen is where a large portion of the cost segregation opportunity is found. A restaurant kitchen is not a standard commercial space. It is built around food preparation, refrigeration, ventilation, sanitation, storage, dishwashing, grease management, and high-volume daily operations.
Commercial kitchens often include expensive systems and equipment that should be reviewed separately from the main building structure. This may include ovens, ranges, fryers, grills, walk-in coolers, freezers, prep tables, dishwashing stations, floor drains, grease traps, exhaust hoods, make-up air systems, refrigeration lines, specialty plumbing, gas lines, dedicated electrical, food storage areas, and washable wall or floor finishes.
Without a cost segregation study, many of these costs may be grouped into the building and depreciated over 39 years. A study reviews the kitchen buildout in more detail to determine which assets are structural building components and which may qualify for shorter depreciation schedules.
This can be especially valuable for restaurant owners because kitchen buildouts are often one of the most expensive parts of opening, purchasing, renovating, or expanding a restaurant. Even a small dining area can require a major investment behind the scenes. The equipment, utility connections, ventilation, refrigeration, and sanitation systems needed to operate a commercial kitchen can add up quickly.
A cost segregation study helps separate those costs into more accurate depreciation categories. Some assets may need to remain on the 39-year schedule, while others may qualify for 5-year, 7-year, or 15-year depreciation. For restaurant owners, that means the kitchen may hold one of the clearest opportunities to accelerate depreciation, improve cash flow, and better match the tax treatment of the property to how the restaurant actually operates.
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 tenant improvements, renovations, property upgrades, leasing costs, and maximizing that year’s return.
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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 restaurant. 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

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