Assisted living community · By proposal
Resident-room FF&E + dining + clinical MEP + amenity grounds
Year-1 federal benefit
Custom-scoped
Senior Living / Assisted Living
Senior living cost segregation: $315K–$2.3M Year-1 deductions.
A senior living community is a residential operating business — dense resident-room FF&E, hospitality common areas, clinical MEP, and large amenity grounds, all reclassifiable out of the long building life.
The 30-second answer
Senior living cost segregation is an engineering-based study that reclassifies an assisted-living, independent-living, memory-care, or skilled-nursing facility's components out of its default depreciation schedule into faster 5-, 7-, and 15-year MACRS classes. A senior living facility blends dense residential FF&E (resident-room furniture, appliances, casework, and finishes), hospitality-style common areas (dining, commercial kitchen, salon, therapy, and activity spaces), specialty and clinical MEP (nurse-call, emergency power, and medical gas where present), and substantial site work (parking, landscaping, and outdoor amenity areas), so it typically reclassifies 21–39% of basis. Because these are operating-business properties with complex ownership, senior living studies are scoped per engagement rather than self-served — contact us for a proposal.
Senior living cost segregation reclassifies 21–39% of depreciable basis from the 27.5- or 39-year shell into 5-, 7-, and 15-year MACRS classes per 26 U.S.C. § 168 and Rev. Proc. 87-56. Under OBBBA's permanent 100% bonus depreciation (placed-in-service 2025+), reclassified components are deductible in year one. All credible cost-seg providers use the same federal framework — industry-standard 2026 construction cost data, MACRS classification, IRS Audit Techniques Guide (Pub 5653) compliance. What differs across property types is land-allocation share, FF&E weight, and material-participation eligibility under §469.
| Property type | Reclass to 5/7/15-yr | Year-1 federal benefit | Study cost |
|---|---|---|---|
| STR | 19–39% | $45K–$280K | From $495 |
| SFR | 5–32% | $10K–$165K | From $495 |
| Condo | 10–17% | $18K–$68K | From $495 |
| Brownstone | 5–20% | $60K–$640K | From $495 |
| Rowhouse | 5–18% | $10K–$170K | From $495 |
| Duplex | 13–21% | $31K–$105K | From $995 |
| Fourplex | 14–29% | $56K–$230K | From $995 |
| Office | 16–29% | $84K–$650K | From $1,995 |
| Retail | 20–37% | $90K–$690K | From $1,995 |
| Industrial | 15–28% | $78K–$840K | From $2,495 |
| Self-storage | 19–36% | $140K–$1.6M | From $2,495 |
| Medical office | 16–29% | $84K–$540K | From $2,995 |
| Mixed-use | 12–23% | $63K–$515K | From $1,995 |
| Multifamily | 14–28% | $44K–$200K | From $995 |
| Multifamily 5+ | 14–26% | $110K–$1.0M | From $1,995 |
| Triplex | 14–26% | $44K–$165K | From $995 |
| Restaurant | 16–29% | $72K–$430K | From $2,995 |
| Vet | 19–36% | $85K–$540K | From $2,995 |
| Gym | 21–40% | $110K–$900K | From $2,995 |
| Dealership | 25–47% | $465K–$4.2M | From $2,995 |
| ADU | 7–14% | $8K–$39K | From $495 |
| Commercial | 18–34% | $94K–$765K | From $1,995 |
| Data center | 43–65% | $2.5M–$29M | $4,995–$54,995 (sub-$100M); $100M+ by proposal |
| Senior living this page | 21–39% | $315K–$2.3M | By proposal |
| Funeral homes | 18–30% | $135K–$900K | By proposal |
| Child day care | 15–28% | $56K–$630K | From $2,995 |
| Adult day care | 14–26% | $78K–$780K | From $2,995 |
| Church | 10–22% | $37K–$825K | From $2,995 |
Reclassification ranges from internal benchmarks across 4,000+ studies; Year-1 federal benefit assumes 37% bracket and full first-year usability. Study costs are Cost Seg Smart pricing — comparable engineering studies elsewhere range $5,000–$15,000+. The ADU figure is an ADU acquired with a house; one the owner built or converted is priced on its documented construction cost, from $995. See full provider comparison.
Real examples
What senior living cost seg looks like in practice.
Estimates assume 37% federal bracket and full first-year usability of the loss (active income offset or REPS). Your actual benefit varies with bracket, basis allocation, and CPA's treatment.
Good fit when…
- ✓Owners or operators of assisted-living, independent-living, memory-care, or skilled-nursing facilities
- ✓Recently acquired or constructed communities where a Form 3115 lookback can capture missed depreciation
Skip it when…
- ×Operators leasing the real estate from a REIT who don't own the building basis
Estimate
Run the numbers on your senior living.
Pre-set to Senior living defaults — adjust price + bracket to match your property.
Estimated Year-1 tax savings · Click to order →
$26,363
on $71,250 of accelerated deductions
Want this in writing for your CPA? Get a 1-page analysis →5-yr15-yr27.5/39-yr
Study cost
$1,995
ROI on study
13×
Delivery
< 1 hour
Estimate based on industry-standard 2026 construction cost data and IRC §168(k). Your actual result varies with property age, condition, and basis allocation.
Frequently asked
Senior living cost segregation, by question.
Do senior living facilities qualify for cost segregation?
Yes. A senior living community blends dense resident-room FF&E and finishes (5-year), hospitality common areas like dining, commercial kitchen, salon, and activity spaces, specialty and clinical MEP such as nurse-call and emergency power, and substantial site work — typically reclassifying 21–39% of basis out of the long building schedule into 5-, 7-, and 15-year property.
What types of senior living does this cover?
Assisted living, independent living, memory care, skilled nursing, and continuing-care retirement communities (CCRCs). Each has a different mix of resident-unit FF&E, clinical infrastructure, and common-area and site work, which the study reflects on the facts of the specific facility.
How is a senior living cost segregation study priced?
Senior living facilities are operating-business properties with complex, often institutional ownership, so studies are scoped per engagement rather than self-served. Contact us with the facility details and we'll provide a proposal.
Regulation references
The rules that govern senior living cost segregation.
- Real estate professional status (REPS) — the 750-hour and 51% tests under 26 U.S.C. § 469(c)(7), and the seven material participation tests under Treas. Reg. § 1.469-5T. Required to offset W-2 income with long-term rental losses unless the property qualifies under the STR loophole.
- Form 3115 (catch-up depreciation) — how to apply cost segregation to a property placed in service in a prior year. Full § 481(a) catch-up adjustment, automatic change-number 7, no IRS user fee.
- Treas. Reg. § 1.469-1T — full reference — all six (A)–(F) exceptions that reclassify a rental as non-rental for passive activity loss purposes.
- Regulations hub — full canonical reference for all cost segregation regulations.
- irsdepreciationrules.com — companion plain-language reference for the underlying IRS depreciation statutes (operated by Cost Seg Smart).
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