Historic properties with rich depreciation components. Beach tourism from Charleston to Hilton Head. South Carolina’s older housing stock creates cost segregation opportunities that newer markets don’t have.
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South Carolina’s cost segregation market has a distinctive advantage that most states don’t: historic properties. Charleston’s Historic District contains some of the oldest residential buildings in the US, and older construction tends to have more separable structural and non-structural elements—brick foundations, ornamental ironwork, period fixtures, custom millwork—that create additional reclassification opportunities beyond standard FF&E.
does cost segregation increase audit risk →
At a top marginal rate of 6.5% (graduated, not flat), South Carolina’s state income tax is moderate. The state conforms to federal bonus depreciation, so both your federal and SC returns reflect the accelerated deductions in Year 1. For a 37% federal investor at the top state rate, the combined effective rate is ~43.5%—one of the higher combined rates among states we cover.
Beyond Charleston, Hilton Head and Myrtle Beach round out the state’s STR market. Beach properties carry the standard heavy furnishing investment, but Charleston’s historic properties add a unique layer of depreciable components that investors in newer markets don’t have access to.
A $650K Downtown Charleston Airbnb generated ~$156,000 in accelerated deductions—roughly $67,900 in combined federal and state tax savings.
Typical South Carolina savings: $30,000-$60,000
South Carolina conforms to federal depreciation rules, including 100% bonus depreciation. Both your federal and SC state returns reflect the accelerated deductions in Year 1.
South Carolina uses a graduated income tax with a top rate of 6.5% (reached at ~$16,000 of taxable income, so most investors are in the top bracket). Combined with the federal rate, a 37% investor sees ~43.5% effective on accelerated deductions.
The state conformity means one set of depreciation schedules covers both returns. Your CPA doesn’t need to maintain separate federal and state calculations—unlike California, where the schedules diverge.
South Carolina conforms to federal bonus depreciation. Both federal and state deductions are taken in Year 1. Combined savings: ~$67,860.
Most investors run a quick estimate before ordering. See your South Carolina numbers here.
South Carolina conforms to federal bonus depreciation. The combined effective rate of ~43.5% is one of the higher rates among states we cover—which means cost segregation produces proportionally larger total savings.
Charleston’s older buildings have more separable components than typical new construction—brick foundations, ornamental ironwork, period fixtures, custom millwork. This creates reclassification opportunities that newer markets don’t offer.
Hilton Head and Myrtle Beach produce standard furnished-STR profiles with strong FF&E allocations. The combination of beach tourism demand and South Carolina’s moderate-to-high combined tax rate makes cost segregation especially impactful.
This Airbnb investor ordered a cost segregation study and used the deductions on their next tax return.
Historic district properties with period architecture create a unique cost segregation profile. Older construction means more separable structural and non-structural elements—ornamental ironwork, custom millwork, brick foundations—that add reclassification value beyond standard FF&E. The downtown/French Quarter STR market commands premium nightly rates, and Folly Beach adds a coastal vacation rental layer.
See Charleston breakdown →The most distinctive use case. Older buildings with period components create additional reclassification opportunities beyond standard furnished STR profiles.
Standard furnished-STR profile with strong FF&E allocations. The combination of beach tourism and SC’s combined tax rate makes these strong candidates.
South Carolina’s population growth supports SFR demand. Newer suburban construction produces standard reclassification profiles.
Have one of these property types? See what your South Carolina property would save.
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