Cost Segregation

Catch-Up Depreciation Case Study: Shopping Center Portfolio

A shopping-center portfolio case study on how Form 3115 catch-up depreciation turned long-trapped deductions into current planning capital.

Planning resource

A working asset for the next advisor conversation.

Use this resource to organize the facts, records, and timing questions before the planning window narrows.

Format

Case Study

Window

Hold

Output

CPA-ready

Look-back depreciation scale

Existing portfolios can still hold current-year tax value.

The owner did not need to amend old returns to start the conversation. The method-change path turned missed depreciation into current planning capital.

reviewed first

Shopping centers reviewed in the initial portfolio pass.

$18.5M+

catch-up deductions

Current-year depreciation identified.

$17M

cumulative savings

Approximate savings across the later relationship.

Case chart

Portfolio review moved trapped deductions forward

Dollar bars compare public case-study amounts. Study-count bars compare the first six reviewed centers with the broader relationship.

Initial centers reviewed

First portfolio pass.

6 centers

Relationship studies

Broader ongoing review.

14 studies

Catch-up deductions

Deductions identified.

$18.5M+

Cumulative savings

Relationship savings.

~$17M

Planning path

Step 1
Review old schedules
Step 2
Identify short-life property
Step 3
File method-change support
Step 4
Use current-year deduction

Case StudyHoldownerinvestorCPA

Last updated: 2026-06-26

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Case-study issue

A family-owned retail portfolio had been using straight-line depreciation for years. Six shopping centers were reviewed through engineering-based cost segregation studies, and the work identified more than $18.5 million in catch-up depreciation deductions.

Those deductions were claimed through a current-year accounting-method change rather than amended returns. The family later continued using studies on new acquisitions, with cumulative tax savings approaching $17 million across the relationship.

Why it matters

Long-time owners often assume they missed the window. In many cases, the bigger question is whether prior depreciation can be reviewed through a look-back study and whether Form 3115 can bring missed deductions into the current planning year.

Planning checks for existing owners

Which properties have never had an engineering-based cost segregation review?
Are fixed asset schedules still carrying building components in one long-life bucket?
Were site improvements, tenant improvements, and specialty systems classified correctly?
Can the CPA use a method-change adjustment without amending old returns?

JPOPE planning lens

Cost segregation is not only an acquisition tool. Existing portfolios can hold substantial trapped depreciation when nobody has reviewed the property file holistically.