Auto dealerships
From the showroom floor to the service bay, most of it is not a 39-year asset.
A dealership runs a showroom, a service department, and a lot full of site work, on top of the building itself. The IRS default writes the whole property off over 39 years. A study finds the parts that should not have to wait that long.
The baseline
39 years for the building. Much less for the operation inside it.
A dealership is nonresidential property, so the default schedule is 39 years. But a dealership is really three operations under one roof: a showroom built to sell, a service department built to repair, and a lot built to display inventory and move customers through. A study separates that from the shell, so the parts tied to running the dealership are not stuck on the building's schedule.
What reclassifies
Where the short-life parts hide in a dealership.
The showroom
Display lighting and showroom fixtures are built to sell cars, not to hold up the building. That kind of decorative and display work can move to a short life.
The service bays
Lifts, pits, and specialized service equipment exist to service vehicles. Equipment like this is a classic short-life asset.
Parts and service casework
Parts-counter casework and cabinetry get the same look a medical or office buildout gets: classified by how it is built and attached, not by a blanket rule.
The lot: paving, signage, lighting
Paving, pylon and showroom signage, and site lighting around the lot are qualifying land improvements, a 15-year life instead of 39.
Site signage and lighting get judged bythe Whiteco factors, six questions the IRS's own audit guide uses to decide whether a part is truly permanent. Being attached to the lot does not, by itself, make a sign or a light pole permanent.
The honest part
Parts-counter casework: not an automatic win.
Some studies push every counter and cabinet to a short life. The case law is more careful. InMetro National Corp. v. Commissioner, removable cabinets and certain lighting qualified as personal property when a buildout was analyzed part by part. InMallinckrodt, Inc. v. Commissioner, drywall and partitions built in place stayed with the building.
So parts and service casework gets classified on its own facts: how it is built, how it is attached, and what it serves.See what makes a study audit-defensible.
- What a dealership study documents:
- Showroom and display fixtures classified by function
- Service-bay equipment tied to its own hookups
- Casework calls supported by how it is built
- Site paving, signage, and lighting at their 15-year class
The matrix advantage
Auto dealerships are one of only seven industries with an IRS matrix.
The IRS's own audit guide,Publication 5653, includes classification matrices for just a handful of industries, and auto dealerships are one of them, alongside auto manufacturing. When a study's classifications match the IRS's published matrix for your property type, the guide tells its own examiners not to make adjustments to those calls. Very few property types get that kind of built-in protection, and dealerships are one of them.
Your dealership already paid for these deductions.
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