AE Tax Advisors

I purchased a 45-space mobile home park in Alabama. Since the tenants own the homes and I own the land and infrastructure, my old CPA was not sure what could be depreciated. His solution was to depreciate the small clubhouse over 27.5 years and call it a day. AE Tax Advisors found $91,000 in savings he completely missed.

The key insight is that mobile home parks have enormous amounts of depreciable land improvements -- roads, concrete pads, utility hookups, sewer lines, water mains, electrical distribution systems, street lighting, fencing, and drainage infrastructure. These are all 15-year property eligible for bonus depreciation, and they typically represent a very large percentage of the purchase price.

AE Tax performed a cost segregation study that properly allocated the purchase price between land (non-depreciable), land improvements (15-year), and the few structures on the property (27.5-year). The land improvement allocation was much larger than my old CPA assumed, and with bonus depreciation, the first-year deduction was substantial.

They also identified the septic systems, well pumps, and community amenities (playground equipment, signage, mailbox stations) as separate depreciable assets with their own recovery periods. Every component was documented and classified.

Total savings: $91,000. For a mobile home park purchase, cost segregation is absolutely essential. The ratio of depreciable improvements to total purchase price is among the highest of any real estate asset class.

AE Tax Advisors understood mobile home park economics and knew exactly how to allocate value between land, improvements, and structures. If you own a park and have not done a cost seg study, you are leaving serious money on the table.