Cost Segregation and 100% Bonus Depreciation in Ohio: What Property Owners Need to Know in 2026

The return of 100% bonus depreciation has made Cost Segregation especially relevant for Ohio property owners in 2026. Under current federal law, certain qualified property acquired and placed in service after January 19, 2025, can generally receive a 100% additional first-year depreciation deduction.

The important distinction is that 100% bonus depreciation does not generally apply to an entire commercial building. A Cost Segregation study can identify building components that may qualify for shorter 5-, 7-, or 15-year recovery periods, and qualifying shorter-life property may then be eligible for bonus depreciation.



Since 2004, RCG Tax Partners has completed more than 25,000 R&D tax credit studies and identified over $750 million in tax savings. RCG applies the same documentation-focused and compliance-driven methodology to Cost Segregation engagements across Ohio, including detailed engineering review of commercial property components. 

What Changed With Bonus Depreciation?  

Federal law restored a permanent 100% additional first-year depreciation deduction for certain qualified property acquired after January 19, 2025. To receive the restored 100% treatment, the property generally must also be placed in service after that date.

This matters because older phase-down rules can still apply to some property.

For example, qualifying property acquired before January 20, 2025 but placed in service during 2026 may remain subject to the prior-law phase-down, which generally provides a 20% bonus depreciation rate for qualifying 2026 property.

That makes the acquisition date and placed-in-service date important parts of a 2026 depreciation review.

How Cost Segregation Connects to 100% Bonus Depreciation  

Think of the process in two steps.

Step 1: Identify the Property Classification  

A Cost Segregation study analyzes building costs to determine whether components should remain longer-life building property or may qualify for shorter recovery periods.



RCG's Cost Segregation process includes reviewing construction costs and invoices, inspecting the property, photographing relevant components, analyzing blueprints when available, performing quantity takeoffs, reconciling costs, and preparing a detailed report. 

Step 2: Determine Bonus Depreciation Eligibility  

Once property has been classified, the taxpayer and tax adviser can determine whether the shorter-life assets meet the separate requirements for bonus depreciation.



Cost Segregation therefore helps identify potentially eligible assets. It does not mean every reclassified cost automatically receives a 100% deduction.

Which Property Components May Be Relevant?  

An Ohio cost segregation 2026 study may evaluate assets such as:

The building structure itself and many general building systems typically remain longer-life real property and are not simply converted into bonus-eligible assets.

A 2026 Decision Map for Ohio Property Owners  

Property owners can use four questions to determine whether a review may be worthwhile.

Was the property recently purchased, constructed, renovated, or expanded?
These events often create costs that may warrant classification analysis.

When was the property acquired?
Property acquired after January 19, 2025 may fall under the restored 100% bonus rules if the other requirements are met.

When was it placed in service?
The placed-in-service date can determine which depreciation rules apply.

Does the property contain substantial shorter-life components?
Manufacturing facilities, apartment properties, warehouses, medical offices, retail centers, and other commercial properties may contain assets that require engineering-based classification.



RCG performs Cost Segregation analyses across Ohio markets including Columbus, Cleveland, Cincinnati, Dayton, Akron, Toledo, Canton, Youngstown, and other commercial and industrial communities. 

What About Existing Properties?  

Cost Segregation is not limited to new construction.

Previously placed-in-service properties may also be evaluated, depending on the available documentation, depreciation history, prior classifications, and applicable tax procedures. RCG specifically notes that Cost Segregation may create an opportunity for catch-up depreciation on previously misclassified property.



The interaction with bonus depreciation depends on when the underlying assets were acquired and placed in service, so older properties should not automatically be assumed to qualify for the current 100% rate.

Ohio Does Not Necessarily Mirror the Federal Result  

The federal depreciation calculation is only part of the analysis.

RCG notes that Ohio starts with federal income calculations but may require state-level adjustments to certain federal depreciation deductions. Therefore, a federal 100% bonus depreciation deduction does not necessarily produce the same immediate Ohio tax result.



Property owners should coordinate the completed Cost Segregation study with their CPA or tax adviser when applying both federal and Ohio depreciation rules.

Quick Answers for 2026 Property Owners 

Evaluate Your Property Under the 2026 Rules  

The combination of cost segregation and bonus depreciation in Ohio can make property classification particularly important in 2026. The key is determining which assets qualify for shorter recovery periods, when those assets were acquired and placed in service, and whether the current bonus depreciation rules apply.

RCG Tax Partners provides engineering-based, documentation-focused Cost Segregation studies for Ohio property owners, developers, and businesses evaluating purchased, constructed, renovated, or expanded commercial real estate.