Morris Cost Seg Consultants

Medical and Dental Offices

Cost segregation for medical offices is a valuable tax strategy that allows property owners to accelerate depreciation and improve cash flow.

Morris Cost Seg Consultants Specialties

Unlock Hidden Tax Savings in Your Medical and Dental Practice

Medical and dental practices invest substantial capital into creating specialized treatment environments that meet stringent healthcare standards while providing comfort for patients. From customized cabinetry and advanced plumbing systems to specialized lighting and medical equipment hookups, these improvements represent significant financial commitments.

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Retail Buildings

What many private practitioners and medical building owners don’t realize is that a cost segregation study can dramatically accelerate the depreciation of these tenant-specific improvements, generating immediate tax savings and improving cash flow.

Morris Cost Seg Consultants specializes in helping medical and dental offices reclassify building components from standard 39-year depreciation schedules to accelerated 5, 7, and 15-year categories. This strategic tax planning approach delivers substantial deductions in the early years of ownership, putting money back into your practice when you need it most.

Understanding Cost Segregation for Healthcare Facilities

Cost segregation is an IRS-approved tax strategy that involves identifying and reclassifying building components to shorten their depreciation timeline. For medical and dental offices, this approach is particularly valuable because healthcare facilities contain numerous specialized improvements that qualify for accelerated depreciation.

Under standard tax treatment, commercial real property is depreciated over 39 years. However, many components within medical and dental offices—particularly those that are tenant-specific or equipment-related—can be reclassified into much shorter depreciation periods:

5-year property: Specialized medical equipment, carpeting, and certain movable fixtures
7-year property: Office furniture, examination tables, and specific dental equipment
15-year property: Land improvements, qualified restaurant property, and certain building components
Qualified Improvement Property (QIP): Tenant-specific improvements made after a building is placed in service, which may qualify for immediate expensing under bonus depreciation

The result? Medical and dental practices can accelerate hundreds of thousands of dollars in deductions, creating immediate tax savings that improve working capital and fuel practice growth.

Why Medical and Dental Offices Are Ideal Candidates for Cost Segregation

Healthcare facilities undergo extensive customization to meet the unique demands of patient care. Unlike standard office spaces, medical and dental offices require:

Specialized Plumbing Infrastructure

Dental offices need complex plumbing systems for operatory suites, including water and suction lines, air/water syringes, ultrasonic scalers, and cuspidors. Medical practices often install specialized sinks, sterilization equipment hookups, and medical gas delivery systems. These specialized plumbing components are distinct from the building’s general plumbing system and often qualify for accelerated depreciation.

Custom Cabinetry and Built-Ins

Medical and dental offices feature extensive custom cabinetry designed for specific clinical purposes—sterilization areas, supply storage, medication dispensaries, and instrument organization. These cabinets are typically removable without damaging the building structure, making them personal property eligible for 5 or 7-year depreciation rather than 39-year real property treatment.

Specialized Lighting Systems

Healthcare facilities require different lighting solutions than typical office spaces. Operatory lighting, examination room fixtures, surgical lights, and specialized task lighting all serve clinical purposes. Many of these systems, including their dedicated electrical circuits and controls, can be segregated for accelerated depreciation.

Medical Equipment Hookups and Dedicated Systems

From dental compressors and vacuum systems to medical gas outlets and specialized electrical circuits for imaging equipment, these infrastructure improvements support specific medical equipment and activities. Their classification as personal property or land improvements often allows for significantly accelerated depreciation.

Partition Systems and Treatment Rooms

The walls dividing treatment rooms, operatories, consultation spaces, and procedure rooms are frequently non-structural partitions that can be removed or relocated. These partition systems, along with their associated doors, hardware, and finishes, often qualify for reclassification.

Who Benefits Most from Medical and Dental Office Cost Segregation?

Cost segregation studies deliver the greatest value for:

Recent Property Purchasers

Practices that have purchased or substantially renovated a facility within the past few years can apply cost segregation retroactively, generating immediate refunds or credits.

Practices Planning Expansions

If you are considering adding space or renovating, a cost segregation study on current property can generate tax savings to fund the expansion.

High-Income Practitioners

Doctors in higher tax brackets (32-37% federal) see the most dramatic savings, with state taxes adding additional benefits.

Medical Building Owners

Real estate investors who own medical or dental buildings can significantly improve property returns through cost segregation.

Practice Buyers and Sellers

Cost segregation studies can be valuable during practice transitions, either maximizing value for sellers or creating immediate benefits for buyers.

WHY CLIENTS CHOOSE MORRIS COST SEG CONSULTANTS

Engineering-Based Cost Segregation. Trusted Experience. Proven Results.

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Initial Consultation

We review your property acquisition details, construction costs, and tax situation to estimate potential savings. This consultation is complimentary and requires minimal time from your team.

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Engagement and Information Gathering

Once engaged, we collect construction documents, purchase agreements, and relevant financial information. We coordinate with your CPA to ensure seamless integration with your tax planning.

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Site Inspection

We work with engineers that will visit your facility to document components, take photographs, and verify construction details. Most site visits take 2-4 hours and can be scheduled around your practice operations.

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Engineering Analysis

We conduct detailed component-level cost allocation, applying IRS guidelines and case law to maximize reclassification while ensuring audit defense.

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Report Delivery

You receive a comprehensive, IRS-ready cost segregation study with detailed component listings, depreciation schedules, and supporting documentation.

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Tax Implementation

We coordinate with your tax professional to incorporate the study results into your tax returns, whether current-year filings or amendments for prior years.

Jim Morris

President | Senior Project Manager
Morris Cost Seg Consultants, LLC

Take Action: Start Saving Today

Every year you delay implementing cost segregation represents lost tax savings and reduced cash flow. Whether you recently purchased or renovated a medical or dental office, or acquired property in prior years, now is the time to explore this powerful tax strategy.

Morris Cost Seg Consultants has helped hundreds of healthcare providers across the country unlock hidden tax savings from their real estate investments. Our specialized knowledge of medical and dental facility construction, combined with our engineering expertise and tax law understanding, ensures you receive maximum benefits while maintaining full IRS compliance.

Schedule your complimentary consultation today. We’ll review your property details, estimate your potential tax savings, and explain exactly how cost segregation can improve your practice’s financial position. There’s no obligation, and the consultation requires minimal time from your busy schedule.

Don’t leave money on the table. Let Morris Cost Seg Consultants show you how to transform your real estate investment into immediate tax savings and improved cash flow. Your practice deserves every advantage, and cost segregation delivers results that directly impact your bottom line.