The Business of Golf – And the Strategy Behind Cost Segregation on the 18th Tee
If you watched or listened to the latest Bosma on Business, you heard Mike and TJ highlighting something experienced operators understand well: Golf isn’t just a sport. It’s a capital-intensive business.
From clubhouse renovations to simulator buildouts, cart barns, restaurant upgrades, and parking lot improvements, golf facilities require constant reinvestment to stay competitive.
But here’s the question most owners don’t ask: Are you maximizing the tax strategy behind those investments?
The Golf Course Business Is an Asset Business
As discussed in the podcast, long-term success in the golf industry often comes down to:
- Smart capital improvements
- Operational discipline
- Revenue diversification (events, dining, simulators)
- Strategic reinvestment
Every one of those strategies involves fixed assets. And fixed assets create depreciation opportunities.
Where Cost Segregation Fits In
Many golf course owners assume their clubhouse or facilities are simply “39-year property.” That’s only partially true. A cost segregation study identifies portions of a golf facility that may qualify for shorter recovery periods (often 5, 7, or 15 years) including:
- Land Improvements (Typically 15-Year Property)
- Parking lots and striping
- Cart paths
- Landscaping and drainage systems
- Retaining walls
- Fencing and exterior lighting
- Concrete sidewalks and curbing
- Personal Property (Often 5-Year Property)
- Built-in cabinetry and millwork
- Retail fixtures in pro shops
- Decorative and specialty lighting
- Dedicated electrical serving kitchen or simulator equipment
- Restaurant and bar equipment connections
- Specialty plumbing tied to business-use equipment
- Fitness center and spa buildouts
Golf Simulator Buildouts
As discussed in the podcast, simulator businesses are gaining traction due to lower weather risk and year-round revenue. From a tax standpoint, simulator improvements often contain substantial 5-year property, including equipment, wiring, specialty buildouts, and dedicated systems, that may qualify for accelerated depreciation.
Why It Matters
Cost segregation doesn’t increase total depreciation over time. It accelerates it. For capital-heavy operations like golf courses, that acceleration can mean:
- Increased near-term cash flow
- Improved debt service coverage
- Capital for course upgrades or expansions
- Funding for simulator additions
- More flexibility during slower seasons
If you’re reinvesting to stay competitive, as successful operators do, you should be equally strategic about how those investments are depreciated. Plus, assets with recovery periods of 20 years or less may qualify for bonus depreciation. Under the One Big Beautiful Bill Act (OBBBA), 100% bonus depreciation has been reinstated for qualifying assets placed in service after January 19, 2025. That creates a renewed window of opportunity for owners planning renovations, expansions, or simulator buildouts to significantly accelerate deductions.
The Takeaway
The podcast makes one thing clear: successful golf operators think like business owners first. They evaluate investments. They assess risk. They reinvest strategically. The tax strategy behind those investments deserves the same level of discipline. If you own or operate a golf course, country club, or golf simulator facility, Keystone CPAs can help evaluate whether cost segregation makes sense for your situation. Because in the golf business, margins matter, and so does timing.