Residential, retail, office and restaurant floor areas
CALIFORNIA MIXED-USE PROPERTY OWNERS
Reviewed September 1, 2026 · Updated for current federal bonus-depreciation guidance
One parcel can contain more than one depreciation system.
California mixed-use projects often combine apartments with ground-floor retail, restaurants, office, structured or surface parking and shared building systems. A useful cost segregation study must first allocate supported basis among residential rental, nonresidential, land and separately owned tenant components before classifying shorter-life assets.
- ✓ No study work before payment
- ✓ CPA-ready final report
- ✓ California statewide
WHY IT MATTERS
Move eligible basis into faster recovery periods.
The residential and commercial portions may use different building recovery periods, while shared roofs, structure, elevators, utilities and common areas require a reasonable allocation. Tenant allowances, acquired-in-place improvements, parking, amenities and later renovations should be tied to ownership and placed-in-service dates so costs are neither duplicated nor pushed into a recovery class merely because of where they sit.
Plain English: you are not creating a new deduction. You are identifying when supported pieces of the property may be depreciated.
WHAT WE REVIEW
Mixed-use records and components to separate
Shared structure, elevators, corridors and building systems
Apartment interiors, amenities and common areas
Tenant allowances, work letters and improvement ownership
Structured parking versus surface site improvements
Land allocation, construction draws and service dates
SHOW ME THE NUMBERS
Illustrative California mixed-use example
Illustrative only. This assumes a 37% federal marginal rate where shown and that the owner can currently use the deduction.
- Property value
- $12,000,000
- Estimated depreciable basis
- $9,000,000
- Potential faster basis
- $1,710,000 to $2,520,000
- Potential upfront federal effect
- $633,000 to $932,000
- Study or comparison benchmark
- $15,000 to $35,000+
This is a timing illustration, not guaranteed permanent tax savings. California commonly requires a separate depreciation schedule because it generally does not conform to federal bonus depreciation.
DOES IT FIT?
Strong candidates usually have four things.
✓
Income-producing residential and commercial uses share a project
✓
Building and land basis can be supported
✓
Tenant and owner improvement costs are separated
✓
CPA can maintain residential and nonresidential schedules
STATEWIDE COVERAGE
Serving owners throughout the region.
Los AngelesSan DiegoOrange CountyBay AreaSacramentoInland EmpireCentral ValleyCentral Coast
PORTFOLIO PRICING
More properties. Lower cost per study.
Order and pay for the properties together to receive a simple portfolio discount.
2 properties5% off3 to 4 properties10% off5+ properties15% off
STRAIGHT ANSWERS
Frequently asked questions.
Why does mixed-use basis need to be separated first?+
Residential rental building property and nonresidential real property generally use different federal recovery periods. The study should support the allocation before classifying components within each use.
How are shared systems allocated?+
Plans, square footage, construction costs, use and other support may inform a reasonable allocation. The method should be documented and consistently reconciled to total basis.
Can tenant improvements be included?+
Potentially, but only by the taxpayer with depreciable basis. Leases, allowances, work letters, invoices and fixed-asset schedules should establish ownership and prevent duplicate costs.
Is structured parking automatically 15-year property?+
No. A structural parking facility and surface land improvements can have different treatment. Construction, integration and function must be reviewed.
Is the free estimate a completed study?+
No. It is an illustrative screen using the facts you provide. No engineering takeoff, professional certification or tax opinion is included. Technical work begins only after a signed and paid engagement.
Does my CPA need to approve the study first?+
No. It is smart to ask whether you can currently use additional depreciation, but the paid study does not require advance CPA approval. Your CPA makes the final filing decision.
Do you guarantee tax savings?+
No. A study accelerates the timing of eligible depreciation. Results depend on basis, property facts, placed-in-service dates, passive-loss rules, tax rates and the owner's filing position.
AUTHORITATIVE SOURCES
Reviewed against current IRS and California guidance.
Last reviewed September 1, 2026. Tax rules and procedures can change. Your CPA should confirm the law that applies to your acquisition date, placed-in-service date and return.
IRS Topic 704: Depreciation↗IRS Cost Segregation Audit Technique Guide↗IRS Notice 2026-11: 100% bonus depreciation guidance↗IRS Notice 2026-16: qualified production property↗California FTB federal tax change summary↗IRS Publication 946: How To Depreciate Property↗IRS Cost Segregation Audit Technique Guide↗California 2025 Form 3885A Instructions↗
FREE PRELIMINARY PROPERTY SCREEN