488 Edgewood Avenue SE, Atlanta, GA 30312
| Property type | Large Multifamily · Large Multifamily |
|---|---|
| Year built | 1986 |
| Square feet | 14,400 |
| Lot size | 21,780 sqft |
| Parcel | 14-0044-0007-031-2 |
Executive summary
This study reclassifies a portion of the property's depreciable basis from 27.5-year residential into shorter recovery periods, accelerating deductions into year one under current bonus depreciation rules.
| Tax year | Detail | Deduction | Cumulative |
|---|---|---|---|
| Year 1 | FY 2025 · Short-life + shell (partial) | $760,781 | $760,781 |
| Year 2 | FY 2026 · 27.5-yr shell | $44,369 | $805,150 |
| Year 3 | FY 2027 · 27.5-yr shell | $44,369 | $849,519 |
| Year 4 | FY 2028 · 27.5-yr shell | $44,369 | $893,888 |
| Year 5 | FY 2029 · 27.5-yr shell | $44,369 | $938,257 |
| Total over 5 years | $938,257 | ||
Short-life property is deducted in full now; only the 27.5-year shell spreads forward.
How the asset depreciates
This year's deduction comes from reclassifying short-life property out of the building basis: the 5- and 15-year components take bonus depreciation now, and the rest depreciates on the regular schedule.
Component allocation
$747,840 of short-life property. The rollup below organizes it by recovery period, then by room, then down to each component and its verified source.
Recovery bucket → room → component line item.
5-year personal property$590,400
Property-wide$590,401
| Appliances & FF&E | ||
| Carpet and flooring (non-permanent) | $84,343 | Archetype |
| Window treatments | $84,343 | Archetype |
| Cabinetry (non-permanent) | $84,343 | Archetype |
| Appliances | $84,343 | Archetype |
| Decorative lighting | $84,343 | Archetype |
| Common-area HVAC (independent) | $84,343 | Archetype |
| Common-area fixtures | $84,343 | Archetype |
15-year land improvements$157,440
Property-wide$157,440
| Site & land improvements | ||
| Driveway and walkways | $39,360 | Archetype |
| Landscaping (depreciable) | $39,360 | Archetype |
| Fencing | $39,360 | Archetype |
| Parking lot striping and signage | $39,360 | Archetype |
27.5-year residential shell$1,220,160
Property-wide$1,220,160
| Structure & envelope | ||
| Residential rental building | $1,220,160 | Archetype |
How the state diverges
Federal bonus depreciation isn't always allowed at the state level. Where a state decouples, the federal bonus is added back and the asset is recovered on the state's own schedule — producing a separate state deduction stream and a basis that diverges from federal through sale.
Georgia decouples from §168(k) bonus while conforming to §179. Federal bonus is added back and recovered under regular MACRS over the class life. Federal bonus added back, depreciation recomputed under regular MACRS · GA Form 4562.
| Tax year | Add-back | Subtraction |
|---|---|---|
| Year 1 | $621,888 | — |
| Year 2 | — | $203,885 |
| Year 3 | — | $126,818 |
| Year 4 | — | $80,137 |
| Year 5 | — | $78,925 |
| Year 6 | — | $43,816 |
Year-one add-back of $621,888 is recovered over the asset lives; the federal bonus and the state schedule recover the same basis, so the adjustments net to zero across the full horizon.
| Tax year | State deduction | Cumulative |
|---|---|---|
| Year 1 | $138,893 | $138,893 |
| Year 2 | $248,254 | $387,147 |
| Year 3 | $171,187 | $558,334 |
| Year 4 | $124,506 | $682,840 |
| Year 5 | $123,294 | $806,134 |
| Year 6 | $88,185 | $894,319 |
| Total over 29 years | $1,967,991 |
| Tax year | Federal basis | GA basis | Divergence |
|---|---|---|---|
| Year 1 | $1,207,219 | $1,829,107 | $621,888 |
| Year 5 | $1,029,741 | $1,161,865 | $132,124 |
| Year 10 | $807,894 | $859,030 | $51,136 |
GA carries more basis forward — federal front-loads depreciation via bonus, so a sale before full recovery shows a larger federal gain than GA.
Verified sources
Every figure traces to a primary source. This is the provenance behind the engineered review: what we relied on, what it established, and how we confirmed it.
| Source | What it verified | How | Status |
|---|---|---|---|
| County assessor record | Land vs. improvement allocation | Public parcel record · 14-0044-0007-031-2 | Verified |
| IRS authorities | Classification & recovery periods | Cross-referenced per component | Verified |
Methodology calibrated to IRS standards
Component allocations follow the IRS Cost Segregation Audit Techniques Guide and MACRS recovery periods. Every assumption traces to a publicly cited authority.
The figures above are fixed by these study-specific inputs: the bonus rate is set by the placed-in-service year, and the disposition is a taxpayer election. They carry through the entire study.
| Tax year of filing | 2025 MACRS recovery periods, conventions, and the bonus rate are applied as in effect for this filing year. |
|---|---|
| First-year bonus rate | 100% IRC §168(k) first-year bonus depreciation. The rate is fixed by the placed-in-service date (Sep 1, 2025) and steps down by year, so it is specific to this property. |
| Land allocation | $432,000 Land is non-depreciable and excluded from the reclassified basis. |
| MACRS conventions | Mid-month / half-year The 27.5-year shell uses the mid-month convention; 5- and 15-year property uses the half-year (or mid-quarter) convention per IRS Pub. 946. |
| Authority | How it applies to this study |
|---|---|
| STATUTE IRC §167 | IRC §167 |
| STATUTE IRC §168 | IRC §168 |
| REV_PROC Rev. Proc. 87-56 | Rev. Proc. 87-56, 1987-2 C.B. 674 |
| ATG Cost Seg ATG | IRS Cost Segregation Audit Technique Guide (revised 2017) |
| CASE Whiteco | Whiteco Industries Inc. v. Commissioner, 65 T.C. 664 (1975) |
| CASE HCA | Hospital Corp. of America v. Commissioner, 109 T.C. 21 (1997), acq. 2000-2 C.B. xvi |
| REV_RUL Rev. Rul. 2003-81 | Rev. Rul. 2003-81, 2003-2 C.B. 126 |
| REG Treas. Reg. §1.167(a)-1 | Treas. Reg. §1.167(a)-1 |
Engineered review pass
Every study runs through the same four-stage engineered review before release: produced by the cost segregation engine, independently re-computed, and cross-checked against IRS authorities and public records.
Source ingestion
Source facts and citations verified at intake.
Component classification
Components mapped to MACRS class lives per Rev. Proc. 87-56 + IRS ATG.
Reconciliation
Allocation sum reconciled to depreciable basis within tolerance.
Compliance check
Bonus eligibility, anti-churning, and completeness validated.
AI engineering review
An AI engineer paired with an IRS audit agent reviews and verifies every study so the calculations are defensible and traceable to tax-law standards.
Independent re-computation
Allocations re-run by a second model and reconciled.
IRS-authority cross-check
Each component mapped to the IRS ATG, Rev. Proc. 87-56, and MACRS class lives.
Audit trail retained
Every source document and the full run log are retained for the audit-defense window.