RALEIGH, N.C. – September 17th, 2026 – Construction companies spend their careers thinking about other people’s buildings — but K-38 Consulting says many contractors who own their own facilities are overlooking a significant tax opportunity tied to that ownership. With the passage of the One Big Beautiful Bill Act (OBBBA) in July 2025, Congress permanently restored 100% bonus depreciation, reversing a multi-year phase-down that had reduced the near-term value of cost segregation studies. K-38 Consulting says construction companies that own their headquarters, equipment yards, fabrication shops, or warehouse facilities are particularly well positioned to benefit, but frequently haven’t pursued a study.
“There’s a strange irony in this,” said Dallas Alford IV, CPA, Founder of K-38 Consulting. “Contractors understand better than almost anyone what goes into a building — the electrical systems, the specialized equipment, the site improvements. That same expertise is exactly what a cost segregation study is built to identify and monetize on their own owned property, and a lot of them have simply never applied that lens to their own facilities.”
What Cost Segregation Identifies in Construction and Industrial Properties
Cost segregation is an engineering-based study that reclassifies specific components of a commercial property — electrical systems, specialized equipment infrastructure, site improvements, and certain building systems — out of the standard 39-year depreciation schedule and into much shorter 5-, 7-, or 15-year categories. Properties with heavy equipment infrastructure, specialized electrical or mechanical systems, or significant site work — exactly the profile of many construction company facilities — often yield a higher-than-average share of components eligible for this accelerated treatment.
Under the now-permanent 100% bonus depreciation rule, every dollar reclassified into a short-life category can be deducted in the first year rather than spread across decades, turning a facility a construction company already owns into a source of immediate tax savings rather than just a fixed, slowly-depreciating asset on the balance sheet.
“A fabrication shop or equipment yard often has significant specialized infrastructure built in — heavy electrical capacity, reinforced flooring, specialized site work for equipment storage and staging,” Alford said. “All of that is exactly the kind of component a cost segregation study is designed to find and reclassify. Contractors are sometimes surprised by how much of their own facility qualifies.”
Why This Matters More for Construction Companies Right Now
K-38 Consulting says the timing is particularly relevant for construction companies for a few specific reasons tied to the industry’s current financial pressures:
Cash flow relief where it’s needed most. Construction firms face some of the tightest working capital constraints of any industry, driven by slow payment cycles and upfront labor and materials costs. A cost segregation study on an owned facility can generate a significant first-year tax deduction, freeing up cash precisely for a business type that consistently needs it.
Retroactive opportunity for recent facility purchases or renovations. Construction companies that purchased, built, or renovated a facility in recent years — even before the OBBBA changes took effect — can generally apply a cost segregation study retroactively through a change in accounting method, capturing previously missed accelerated depreciation without amending prior returns.
A natural fit alongside other construction-specific tax strategies. For construction companies already working with a CFO or tax advisor on R&D tax credits tied to process innovation or equipment tracking, a cost segregation study on owned facilities represents a complementary, often underused strategy that fits naturally alongside existing tax planning.
“For a lot of contractors, this isn’t a strategy they need to go find — it’s already sitting on their balance sheet in the form of a facility they own,” Alford said. “The opportunity cost of not pursuing a study is real cash left unclaimed.”
Construction companies evaluating whether their facilities qualify shouldn’t assume the opportunity is limited to large, purpose-built properties. Even modest facilities — a leased-to-own equipment yard with significant site work, or a converted warehouse used for fabrication — can contain qualifying components most owners never think to evaluate separately from the building as a whole. The determining factor isn’t the size or age of the facility, but the specific systems and improvements within it.
What K-38 Consulting Recommends
Given the current rules, K-38 Consulting recommends construction companies that own real estate:
• Evaluate any owned facility for a cost segregation study, including headquarters buildings, equipment yards, fabrication shops, and warehouse space — not just large commercial developments.
• Review facilities purchased or renovated in recent years, since the retroactive catch-up option may still allow a company to capture the full value of a study, even without amending prior tax returns.
• Coordinate cost segregation with broader tax and cash flow strategy, particularly given how directly the resulting deduction can support working capital needs specific to construction’s payment cycle challenges.
• Work with a specialist familiar with industrial and construction-specific property, since heavy equipment infrastructure and specialized site work require accurate technical classification to withstand IRS scrutiny.
How K-38 Consulting Supports Construction Companies
K-38 Consulting’s cost segregation services help construction companies identify and document accelerated depreciation opportunities on owned facilities, working alongside the firm’s construction CFO services to turn that tax savings into strategic working capital rather than an isolated year-end filing exercise. This work is part of K-38 Consulting’s broader outsourced CFO services for contractors and construction firms navigating an industry where cash flow discipline is especially critical.
“A dollar of tax savings that gets reinvested into working capital or equipment is a dollar that didn’t have to come from a loan or a slow-paying client,” Alford said. “For an industry that’s constantly managing tight cash cycles, that difference matters.”
About K-38 Consulting
K-38 Consulting provides fractional and outsourced CFO services, controller services, and tax strategy — including R&D tax credit and cost segregation services — to startups and midsize businesses across the country. The firm serves clients in SaaS, biotech, healthcare, law, ecommerce, CPG, construction, and real estate, delivering the financial leadership, forecasting tools, and strategic guidance typically available only to companies with a full in-house finance team. K-38 Consulting is headquartered in Raleigh, North Carolina, with clients nationwide.
Media Contact: K-38 Consulting 3809 La Costa Way, Raleigh, NC 27610 (910) 262-4412 [press contact email] [https://k38consulting.com](https://k38consulting.com)
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Company Name: K38 Consulting, LLC
Contact Person: Dallas Alford
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Phone: 9102624412
Address:3809 La Costa Way
City: Raleigh
State: NC
Country: United States
Website: https://www.k38consulting.com/
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