Warehouses
Warehouse shells are generally 39-year nonresidential real property. There is no IRS warehouse matrix. Rack systems and material-handling equipment are usually personal property; dock structure is usually building. A warehouse used only for storage is not qualified production property.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- The building, including typical dock-high floors and the roof, is nonresidential real property recovered over 39 years.
- Treas. Reg. §1.48-1(e)(1) lists warehouses as buildings. Storage racks and handling equipment are generally personal property under §1.48-1(c).
- Dock levelers, seals, and the dock structure are generally building; compactors, conveyors, and hoists are generally personal property in analogous ATG rows.
- Rev. Rul. 2003-81 requires checking asset classes before activity classes. A lessor uses the lessee’s activity.
- Section 168(n) is elective, temporary, and excludes storage, offices, and parking. This page draws no QPP eligibility conclusion (flag F-03).
- Bonus depreciation as of 2026 can apply to qualified equipment and site work acquired after January 19, 2025, not to the 39-year box.
A dry warehouse is a 39-year box plus, on many sites, 15-year paving and shorter-lived handling equipment. Treas. Reg. §1.48-1(e)(1) lists warehouses among examples of buildings. Structural components include the slab, walls, roof, general lighting, restroom plumbing, fire sprinklers that protect the building, and central HVAC. Those items stay with the building unless a specific exception applies.
No IRS warehouse matrix appears in Publication 5653. The retail matrix discusses loading docks and ripening rooms in a distribution-center setting; the pharmaceutical matrix discusses truck parking ramps and staging areas as class 00.3. Those rows are analogies when used on a dry warehouse. Rev. Rul. 2003-81 reminds examiners to place an item in an asset category (classes 00.11–00.4) before an activity category unless the activity class specifically includes it.
Storage racks and material-handling equipment are typically tangible personal property. Do not assume racks are 39-year property because they are bolted to the slab, and do not assume every extra ampere of lighting is 5-year property because it lights a rack aisle. Primary building lighting is a structural component. Process lighting that exists only for equipment can be personal property under the ATG lighting test when the facts match.
Cold storage and freezer buildings add process refrigeration. The refrigerated structure is generally §1250; the refrigeration equipment can be §1245. Sole-justification HVAC or refrigeration that exists only to meet temperature requirements essential for processing or storing foodstuffs can be personal property under Treas. Reg. §1.48-1(e)(2). Allocation of HVAC is not appropriate under the ATG matrices. A comfort unit that cools offices is building.
A warehouse used only for storage is not a manufacturing building. Section 168(n) allows an elective 100% allowance for a defined portion of nonresidential real property used as an integral part of a qualified production activity. Notice 2026-16 and the statute exclude portions used for offices, administrative services, lodging, parking, sales, research, software development, or engineering. Storage is not a qualified production activity on the sources opened here. This page does not conclude that any warehouse is or is not QPP.
This article is educational information, not tax advice. Proposed Super Intelligence rack take-offs are explanatory only.
Docks, paving, and land improvements
Truck courts, employee lots, and site lighting poles are usually class 00.3, 15-year. Building-mounted dock lights and the dock pit structure are generally building. Compactors, conveyors, and hoists are personal-property candidates. Dock levelers and seals are treated as building in the retail matrix’s dock discussion; copy that row only when the facts match.
Landscaping follows the replacement test used in the dealership and residential matrices. Fencing is listed in Treas. Reg. §1.48-1(c) as not tangible personal property and is typically 00.3.
Electrical and process utilities
ATG Chapter 8.A allows functional allocation of primary and secondary electrical distribution by design load to §1245 end uses. Scott Paper is the leading case. General warehouse lighting and HVAC loads stay with the building. Dedicated equipment power can be personal property when the load letter supports it.
Do not extend that allocation to HVAC or plumbing as an IRS-accepted method. The ATG is specific that HVAC allocation is not appropriate and that electrical allocation applies to primary and secondary distribution.
Documentation
Rack and equipment invoices kept out of the building contract, dock shop drawings, refrigeration one-lines, and a load letter that separates process from building loads are the useful records. Acquisition studies need land first and a field inspection. Peco Foods can bind a written allocation when the purchase is an applicable asset acquisition.
The ATG rejects a pro-rata step-up of estimates to force reconciliation to purchase price and gives a warehouse example of that error. Use one estimating technique and explain differences.
Bonus depreciation and QPP as of 2026
Qualified property acquired after January 19, 2025 is eligible for 100% bonus depreciation under Notice 2026-11. The 39-year warehouse is not qualified property under §168(k). Racks, handling equipment, qualifying process utilities, 15-year site work, and QIP can be. Binding contracts on or before January 19, 2025 stay on the phase-down.
QIP can apply to later interior improvements of the nonresidential building if §168(e)(6) is met. Section 168(n) is a separate elective allowance with construction-start and placed-in-service windows; it is interim guidance. Discuss any QPP election with a CPA. Do not treat a storage warehouse as QPP on this page. Educational information, not tax advice.
Limits
There is no warehouse matrix. Do not invent a typical warehouse reclass percentage. Activity class of the user — wholesale class 57.0 versus a manufacturing class — can change recovery periods for process assets.
Self-storage and distribution centers have their own pages. A mezzanine that is part of the building differs from an equipment-access mezzanine in the auto-manufacturing matrix; that distinction is analogy only.
Sources
- 1
- 2
- 3
- 4IRS Publication 946 — How To Depreciate Property (2025)(opens in a new tab)
Appendix B reproduces the Rev. Proc. 87-56 class lives.
- 5
- 6IRS Publication 5653 — Cost Segregation Audit Techniques Guide (rev. 2-2025)(opens in a new tab)
Written for IRS examiners. The guide states it is not an official pronouncement of law and cannot be cited as authority. It predates the July 2025 law.