Tax Smart Real Estate Investors

Cost Segregation: What Can Be Depreciated in a Kitchen?

The video explains how cost segregation can be applied to kitchens in short‑term rental properties, highlighting which components qualify for accelerated depreciation under current tax rules. Edward Griffith points out that cabinetry and countertops are treated as bonus‑eligible assets, while sinks, drain assemblies, and their connections also qualify. Appliances such as dishwashers, ovens, and exhaust fans fall under five‑year property and can be fully written off, including the dedicated wiring and circuit breakers. Most flooring—vinyl, laminate, and floating types—receives bonus treatment, whereas integral tile is generally considered part of the building structure and is excluded. He notes, “cabinets >> are bonus eligible,” and warns that countertop receptacles are a gray area that may face audit scrutiny because the IRS allows any plug to be used. The discussion underscores the distinction between short‑term and long‑term rentals, with the former offering broader eligibility for bonus depreciation. Accelerating these deductions can significantly improve cash flow for rental owners, but the nuanced rules mean professional cost‑segregation advice is essential to avoid misclassification and potential audit issues.