Hotel owners and hospitality groups have massive cost segregation and depreciation opportunities that most CPAs leave untouched.
These are the opportunities we find in nearly every hotel & hospitality engagement — money left on the table by traditional CPAs.
Depreciating hotel properties over 39 years when cost segregation can reclassify 25-40% to shorter lives
Missing FF&E (furniture, fixtures, equipment) depreciation acceleration on room renovations
Not separating hotel real estate from management and operations entities
Failing to plan 1031 exchanges before property dispositions
Underutilizing WOTC for high-turnover housekeeping, front desk, and service staff
These are the strategies we evaluate and deploy for every hotel & hospitality client — tailored to your specific numbers.
Cost segregation on hotel properties — reclassify lobby finishes, room fixtures, plumbing, HVAC, parking, and landscaping to 5/7/15-year property
FF&E depreciation on room renovations — furniture, carpet, fixtures, and technology can be expensed or accelerated
1031 exchanges to defer capital gains on hotel property dispositions indefinitely
Entity structuring: separate property ownership, management company, and operations
Work Opportunity Tax Credit (WOTC) — $2,400–$9,600 per qualifying new hire from high-volume roles
How we turned a $217K tax bill into over $1M in cumulative savings.
Hotel properties are among the best candidates for cost segregation. A $5M hotel can typically reclassify $1.25M–$2M to shorter-lived assets, generating $300K–$600K+ in first-year deductions. Qualifying components include room fixtures, carpeting, lobby finishes, HVAC, parking areas, and landscaping.
FF&E (furniture, fixtures, and equipment) from room renovations can often be expensed immediately using Section 179 or bonus depreciation rather than depreciating over the life of the building. A $500K room renovation could generate $200K–$300K in accelerated deductions.
Yes. The standard structure places the hotel property in an LLC, with a separate management company handling operations. This protects the real estate from operational liabilities, creates legitimate lease/management fee deductions, and positions you for cleaner 1031 exchanges or property sales.
A 1031 exchange lets you sell a hotel property and defer all capital gains taxes by reinvesting the proceeds into a like-kind replacement property within strict timelines. Hotel-to-hotel exchanges are straightforward, and you can chain them indefinitely.
We analyze your current situation, identify every opportunity, and show you exactly what you're leaving on the table. If we can save you money, we'll present a clear proposal with a fixed fee.
Book a free review and we'll identify the hotel & hospitality-specific opportunities hiding in your numbers.
Tell us about your business and we'll identify every savings opportunity available to you.