Cost Segregation for Coquina Sands Luxury Rentals

If you own or plan to buy a luxury rental in Coquina Sands, you may be leaving cash on the table. Many high‑end homes and condos here include features that qualify for faster tax depreciation when properly identified. With recent federal changes, the potential first‑year deductions can be significant. In this guide, you’ll see how cost segregation works, what the 2025 bonus depreciation rules mean, and the local rental factors to confirm before you move forward. Let’s dive in.

Cost segregation in simple terms

Cost segregation separates a property’s purchase price into parts that depreciate faster than the building itself. Items like appliances, specialty lighting, pool equipment, certain landscaping, and dock components may qualify for 5, 7, or 15‑year lives instead of the 27.5‑year residential schedule. That means larger deductions sooner, which can improve cash flow. For the basics on residential rental depreciation, see the IRS guide to rental property rules in Publication 527.

• Reference: Review residential rental depreciation rules in IRS Publication 527.

2025 bonus depreciation boost

In 2025, Congress restored 100% bonus depreciation for qualifying property placed in service after January 19, 2025. When you combine a cost segregation study with bonus depreciation, most reclassified components with lives of 20 years or less can be deducted in year one. Timing matters, so confirm your acquisition date, placed‑in‑service date, and any binding contract dates with your CPA.

• Reference: See the 2025 changes summarized by Mayer Brown.

Why Coquina Sands is a strong fit

Coquina Sands features luxury single‑family homes and beachfront or near‑beach condos close to Lowdermilk Park and Gulf Shore Boulevard. High‑end finishes, pools and hardscapes, landscape lighting, outdoor kitchens, and docks create more components that may qualify for shorter lives. If you have done, or plan to do, interior renovations, certain improvements can qualify as Qualified Improvement Property with a 15‑year life.

• Reference: Learn how interior improvements can qualify as QIP in the Journal of Accountancy overview.

Local rental rules you must confirm

Coquina Sands addresses can fall inside the City of Naples, or in unincorporated Collier County. This matters for short‑term rental use.

• City of Naples: Most single‑family rentals require 30‑day minimum stays, with up to three shorter stays allowed per calendar year. See the city’s STR guidance here.
• Unincorporated Collier County: Short‑term rentals are commonly allowed but require county registration, and applicable state licensing. Start with the county’s registration page here.

Also review your HOA or condominium documents, since some buildings set their own rental limits.

Who tends to benefit most

You are more likely to see strong results if you:

• Bought a high‑basis luxury home or condo recently.
• Added major renovations or high‑value interiors and amenities.
• Operate as a short‑term rental and meet material participation tests. In some cases, that treatment can allow accelerated losses to offset other income. Review the IRS tests in Publication 925.

What savings to expect

Every property is unique, but industry analysis often sees 20% to 40% of a building’s depreciable basis reclassified into shorter lives for many asset types. In Coquina Sands, features like pools, exterior lighting, docks, premium appliances, and custom built‑ins can increase that share. With 100% bonus depreciation available for qualifying property placed in service after January 19, 2025, first‑year deductions can be substantial. Your actual savings depend on purchase price, land allocation, improvement costs, timing, and your federal tax rate.

Study cost and timing

Professional studies for luxury single‑family or condo assets typically range from several thousand dollars to five figures, depending on size and complexity. The earlier you complete the study, the cleaner the reporting and the sooner the benefits start. If you missed it in earlier years, a method change can often capture previously unclaimed depreciation without amending older returns.

• Reference: See practical guidance on method changes and QIP in KBKG’s overview.

How the study works

• Scope and records: Provide your closing statement, land and building allocations, plans, renovation invoices, and any finish schedules.
• Site review: An engineer or specialist documents interior and exterior components, from mechanicals to hardscape and dock elements.
• Cost modeling: They assign costs to each asset using construction pricing data and prepare MACRS schedules.
• Report delivery: You and your CPA use the schedules to claim depreciation and bonus where allowed.

Records to keep

Maintain your purchase documents, land vs building allocation, renovation invoices, furniture and appliance receipts, permits, photos, and the final engineering report. Good records support your return positions if the IRS reviews your file.

Exit planning and recapture

Accelerating depreciation increases depreciation recapture on sale. Personal property and short‑life assets are generally subject to Section 1245 recapture, and building depreciation may be subject to unrecaptured Section 1250 rules. Many owners still prefer the upfront cash flow benefit, especially if they plan strategies like a 1031 exchange or long holding periods.

• Reference: Review disposition and recapture rules in the IRS Instructions for Form 4797.

Florida tax context

Florida has no state individual income tax, so the benefit from accelerated federal depreciation usually flows straight to your bottom line. If you hold property in a C‑corporation, consider how Florida corporate tax affects your results.

• Reference: See the state tax overview from the Tax Foundation.

Short‑term rental taxes and filings

If you host stays under six months, you must register and remit taxes on lodging revenue. Collier County imposes a Tourist Development Tax that has been 5% in recent years, and commissioners have discussed a possible increase. Florida sales tax also applies to transient rentals, and you may need a state license depending on your setup.

• Reference: Read local discussion of the Tourist Development Tax at the Collier Clerk’s site.

Quick start checklist

• Confirm your address is inside the City of Naples or in unincorporated Collier, then verify rental rules and advertising limits. City STR rules are posted here.
• Review HOA or condo documents for rental restrictions.
• Model your benefit with a CPA, including 100% bonus depreciation timing for assets placed in service after January 19, 2025.
• Get a proposal from an engineering‑based cost segregation firm and compare the fee to projected tax savings.
• Complete required STR registrations and taxes in Collier County, then handle state licensing and sales tax filings. Start the county process here.

A local partner for smart moves

Coquina Sands offers a rare mix of beach access and luxury living, which makes the tax conversation worth having before and after you buy. If you want to evaluate properties through both a lifestyle and investment lens, let’s connect. For discreet guidance on Coquina Sands homes and luxury condos, reach out to Michael Dekic.

FAQs

What is cost segregation for a Coquina Sands rental?

• It is an engineering analysis that identifies parts of your property that can be depreciated over 5, 7, or 15 years instead of the 27.5‑year residential schedule, which can increase early‑year tax deductions. See IRS Publication 527 for rental depreciation basics.

How does 100% bonus depreciation affect Naples owners in 2025?

• Qualifying components placed in service after January 19, 2025 may be deducted in full in year one, which can greatly amplify cost segregation benefits. Review the 2025 changes in Mayer Brown’s summary.

Are short‑term rentals allowed in Coquina Sands?

• It depends on jurisdiction and building rules. City of Naples limits single‑family rentals under 30 days with narrow exceptions, while unincorporated Collier requires STR registration. Check the city’s rules here and county registration here.

Will I pay more tax when I sell if I do a study?

• Accelerated depreciation can increase depreciation recapture, which may be taxed at ordinary or special rates when you sell. Many investors still prefer the time value of upfront deductions. See IRS Form 4797 instructions for details.

Does Florida tax my federal depreciation benefit?

• Florida has no state individual income tax, so individual owners usually benefit directly from federal acceleration. Corporate owners should model Florida corporate tax. See the Tax Foundation’s Florida overview.