Nick Coppola helps ground-up hotel developers evaluate cost segregation, reusable interior partitions and future renovation expenses before construction decisions are finalized.
-- Tax Logic CRE has published a new guide explaining how hotel developers may still find tax savings after the federal Section 179D energy-efficient commercial buildings deduction ended for projects beginning construction after June 30, 2026.
The guide focuses on a frequently overlooked opportunity: moving the tax conversation upstream, before interior walls and other building components are installed.
“Cost segregation normally asks what you built,” said Nick Coppola, founder of Tax Logic CRE. “I want hotel developers asking that question one step earlier: What should we build if we already know the property is going to change?”
Hotels are renovated repeatedly throughout their operating lives. Guestrooms are refreshed, corridors are reconfigured, restaurants move, meeting space changes and back-of-house areas are redesigned. Brand-mandated property improvement plans can also require substantial interior construction during an owner’s hold period.
Yet most hotel interiors are constructed as though the original layout will remain unchanged for the life of the building.
Tax Logic CRE’s new guide, “What Should Hotel Developers Do After Section 179D? Rethink Interior Walls Before Construction,” explains how developers can evaluate construction decisions through an after-tax, lifecycle-cost perspective.
Moving Cost Segregation Upstream
Engineering-based cost segregation studies identify qualifying building components that may be assigned to shorter depreciation periods instead of remaining in long-term building depreciation.
Although these studies are often completed after a hotel is placed in service, Tax Logic CRE says ground-up developers can begin planning and documenting potentially qualifying components much earlier.
Under current federal law, qualifying property acquired and placed in service after January 19, 2025, may be eligible for 100% first-year bonus depreciation under Section 168(k).
Whether a particular component qualifies depends on its design, installation, function and use. Tax Logic CRE cautions that no removable wall or other construction system automatically qualifies for five-year treatment.
“The engineering and the facts still control,” Coppola said. “The advantage of a ground-up project is that we can evaluate and document those facts before the walls are installed.”
Rethinking Interior Drywall
The guide also examines a patented partition technology designed to allow non-load-bearing drywall partitions to be removed, relocated and reused with less destructive demolition than conventional drywall construction.
For hotel developers, the analysis extends beyond the initial cost of the wall.
Developers can evaluate potential tax treatment alongside future renovation labor, material reuse, demolition costs, landfill expense, construction disruption and the treatment of components removed or replaced during later renovations.
“If the first renovation is already visible on the day the hotel opens, the original construction plan should account for it,” Coppola said.
Tax Logic CRE describes this approach as an after-tax construction overlay. The architect determines how the hotel should function. The contractor determines how it should be built. The developer evaluates cost and return. The tax and engineering team examines how those decisions may affect after-tax cash flow over the ownership period.
“The biggest mistake is waiting until the hotel is finished to start thinking about tax,” Nick Coppola said. “By then, every important construction decision has already been made.”
Hotel owners and developers can read the Ground-Up Hotel Tax Strategy guide and Tax Logic CRE’s analysis of what developers should do after Section 179D.
About the company: Tax Logic CRE helps commercial real estate owners, investors and developers evaluate engineering-based cost segregation, accelerated depreciation, reusable-wall strategies and other property-level tax decisions. Founded by Nick Coppola, the firm works alongside CPAs, attorneys, developers and engineers, focusing on hotels, healthcare facilities, senior living communities and multifamily properties.
Contact Info:
Name: Nick Coppola
Email: Send Email
Organization: Tax Logic CRE
Address: 3609 The Plaza Charlotte NC 28205
Phone: (919) 632-0133
Website: https://taxlogiccre.com/
Release ID: 89200983
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