Cost segregation for resorts
A resort spends most of its capital outside the guest rooms. Pools and water features, multiple food-and-beverage outlets, recreation systems, and elaborate landscaped grounds mean the site improvements and amenity equipment often rival or exceed the FF&E line. That amenity density is why resorts sit at the high end of hospitality reclassification, commonly 25–42%: the more of the guest experience that lives in 15-year land improvements and 5-year recreation equipment, the less of the basis is trapped in the 39-year shell.
| Modeled reclass range | 25–42% |
|---|---|
| Typical study fee (Cost Seg Smart) | See pricing guide |
| Recovery periods captured | 5-, 7- and 15-year vs the 39-year shell |
| Delivery | Engineering-based; virtual or on-site depending on the provider |
1What reclassifies in a resorts
Cost segregation moves qualifying components out of the 39-year building shell into shorter recovery periods. In a resort the recurring short-life components are:
| Component | Recovery period | Authority carried (with caveat) |
|---|---|---|
| Guest-room & villa FF&E where owned | 5-year | Personal property (Asset Class 57.0) across rooms, suites, and villas; reconcile to the ledger where villas are individually owned or in a rental program. Ownership structure, not key count alone, sets the countable base. |
| Pools, spas & decorative water features — mechanical systems | 5-year | Pumps, heaters, filtration, and feature controls generally qualify as equipment; the basins, shells, and hardscape deck are 15-year land improvements or 39-year building. Separate the mechanical system from the constructed shell. |
| Multiple food-and-beverage kitchen suites | 5-year | Commercial kitchen equipment across several outlets is generally personal property; built-in hoods and connections may follow the building. Scales with the number of outlets, an item-by-item determination. |
| Recreation equipment — marina, golf, tennis, and fitness systems | 5-year | Amenity equipment may qualify as §1245 property where it functions as equipment rather than structure; associated paving and courts are typically 15-year land improvements. Present only for the amenities the resort actually operates. |
| Landscaping & site amenities | 15-year | Land improvements (Asset Class 00.3) covering hardscape, irrigation, walkways, and site lighting; general grading of the land itself is non-depreciable. The distinction between improvement and land is fact-specific. |
| Decorative & landscape lighting | 5-year | Decorative interior fixtures and certain landscape accent lighting may qualify; base building and parking-lot illumination stay longer-life. A fixture-level judgment. |
2Typical results and what drives the spread
Across standardized resort configurations, the engine models an accelerated share of roughly 25–42%. Where villas or units sit in a mixed-ownership rental program, the countable FF&E and improvement base depends on who holds title to each element, which the study reconciles before settling the figure. These are modeled ranges, not a promise for any specific building — see by the numbers.
3By the numbers (original data)
4What a study costs for this type
Study fees track building size, documentation quality and whether an on-site inspection is performed. See the pricing guide for current market bands; competitor fees are sourced there, not quoted in prose here.
5Provider comparison — the Top 5 for this asset class
Every provider below is scored on the same fixed rubric, weighting relevant resort evidence most heavily. Facts are drawn from each provider's public materials and dated.
| Provider | Score* | Relevant resort evidence | Profile | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| RE Cost Seg Engineering-first · National (Houston, TX) Best published pricing Best for virtual delivery Most transparent turnaround | 7.9How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| Cost Seg Smart site owner Engineering-first Best published pricing Best for virtual delivery | 7.8How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| Baker Tilly National accounting/advisory · National (Chicago, IL) Best for national on-site coverage Most transparent turnaround | 7.6How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| Source Advisors Engineering-first · National (Fort Worth, TX) Best for national on-site coverage | 7.3How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| Cherry Bekaert Engineering-first · National (Richmond, VA; #1 Southeast) Best for national on-site coverage | 7.2How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → |
Top 5 of 22 firms scored for resort. See every firm's full profile and per-type standing in the provider directory.
*Score is this site's published rubric output (0–10) for resort, weighting relevant property-type evidence most heavily (see how we compare) — click any score for its build-up. It is not a customer rating and no reviews are used. Cost Seg Smart is the site owner and is scored on the same rubric.
6Is it worth it — break-even
The present-value benefit generally clears a study fee well before basis reaches the seven-figure midpoint given the amenity density, and earlier still where bonus depreciation applies to the large 5- and 15-year lines. It is weakest where a near-term disposition triggers §1245 recapture on the recreation and FF&E equipment.
7Frequently asked questions
Why do resorts reclassify a larger share than typical hotels?
Because so much of a resort's capital sits outside the building — pools, water features, landscaped grounds, and recreation systems — which fall into 15-year land improvements and 5-year equipment rather than the 39-year shell. That amenity density is why the modeled band, 25–42%, runs above other hospitality types, subject to your property's facts.
Is the golf course or the landscaped grounds depreciable?
It depends on the element. Constructed improvements — irrigation, cart paths, hardscape, site lighting — are generally 15-year land improvements, while the raw land and general grading are non-depreciable. Course and grounds shaping requires care to separate the improvement from the land underneath it.
How are the pools and water features treated?
The mechanical systems — pumps, heaters, filtration, feature controls — generally qualify as 5-year equipment, while the basins, shells, and surrounding hardscape are 15-year land improvements or part of the 39-year building. The study separates the operating equipment from the constructed shell.
We have villas in a rental program — whose depreciation is it?
Only assets you own and depreciate can be reclassified on your return. In a mixed-ownership rental program the countable base depends on who holds title to each unit and its furnishings, so the study reconciles ownership before assigning any figure.
Does a resort's amenity equipment face recapture on sale?
Yes. Gain attributable to the reclassified §1245 recreation and FF&E equipment is generally recaptured as ordinary income when the property is sold, separate from the building's §1250 gain. That makes the strategy strongest for a longer hold and weaker where a sale is near.
Sources and authority consulted
- Rev. Proc. 87-56 (MACRS asset classes)
- IRS Cost Segregation Audit Techniques Guide (Pub 5653)
- Cost Seg Smart per-vertical component engine (modeled ranges + component authorities).
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