Free Technical Guide — Cost Segregation

Cost Segregation Explained for Mobile Home Park Owners

A cost segregation study on the right MHP property can generate substantial first-year deductions through bonus depreciation. Here’s exactly how it works — and how to know if your park qualifies.

  • Understand which MHP assets qualify — roads (15-year), utilities (15-year), park-owned homes (5-year), fencing (15-year) — and why most parks have a substantial amount in short-life categories
  • See how cost segregation and bonus depreciation work together — why each is significantly less powerful without the other, and how to time the study for maximum effect
  • Know exactly when a study makes sense and when it doesn’t — the size thresholds, income requirements, and questions to ask before you hire a cost segregation firm

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What’s Inside

8 Topics Every MHP Owner Needs to Understand

Section 1

The IRS Mechanism in Plain English

What cost segregation is, why the IRS allows it, and how an engineering study reclassifies assets from long-life schedules into their correct short-life categories.

Section 2

What Qualifies in an MHP

A complete table of MHP assets mapped to their correct MACRS classification — from POHs and appliances (5-year) to roads, utilities, and fencing (15-year).

Section 3

The Bonus Depreciation Amplifier

Why cost segregation and bonus depreciation multiply each other’s effect — and why each is significantly less valuable without the other.

Section 4

A Hypothetical Park Example

A worked illustration showing how asset reclassification changes the depreciation timeline — with appropriate caveats that results vary by park composition.

Section 5

When to Order the Study

At acquisition vs lookback study via Form 3115 — the timing decision and when each approach is most appropriate for your situation.

Section 6

The 4-Step Study Process

What actually happens from engagement through final report — information gathering, site inspection, engineering analysis, and tax return integration.

Section 7

Does Your Park Qualify?

Size thresholds, improvement composition, POH count, passive activity limitations — the practical factors that determine whether a study makes financial sense.

Section 8

Questions to Ask Before Hiring

Six specific questions that separate qualified cost segregation firms with MHP experience from generalists who will miss park-specific assets.

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This guide is for informational purposes only and does not constitute tax, legal, or financial advice. The MHP Accountant recommends consulting a qualified CPA for advice specific to your situation.