Cost segregation for assisted-living & senior-living facilities
Assisted living is a hybrid: residential-style units with the finishes, appliances and cabinetry of an apartment, wrapped around institutional systems a home never has — nurse-call, wander-management, commercial kitchens and laundries, generators, and amenity spaces that run like a small hospitality operation. That blend is why the short-life pool here is broad but rarely as deep as a clinical facility's.
| Modeled reclass range | 12–28% |
|---|---|
| Typical study fee (Cost Seg Smart) | See pricing guide |
| Recovery periods captured | 5-, 7- and 15-year vs the 39-year shell |
| Delivery | Engineering-based; virtual or on-site depending on the provider |
1What reclassifies in a assisted-living & senior-living facilities
In a senior / assisted living, cost segregation typically reclassifies 12–28% of depreciable basis out of the 39-year building shell into 5-, 7- and 15-year property. The components that recur:
| Component | Recovery period | Authority carried (with caveat) |
|---|---|---|
| Nurse-call & wander-management — call stations, door controls, resident locating/egress | 5-year | Special-purpose clinical and safety systems serving resident care generally reclassify; ordinary building fire alarm and general access control follow their own rules and often stay 39-year. |
| Commercial kitchen & laundry — cooking line, hoods, walk-ins, washers/extractors | 5-year | Special-purpose equipment and its dedicated connections generally qualify; the rooms, floors and base utilities around them stay with the shell. |
| Backup generator & transfer switchgear | engineer review | Emergency power dedicated to identifiable life-safety and resident-care loads can be arguable; capacity serving general building load stays 39-year, so classification turns on a load allocation. |
| Resident-unit finishes, appliances & cabinetry | 5-year | Non-structural finishes, unit appliances and casework generally reclassify as personal property serving the units; structural elements and permanent building systems remain 39-year. |
| Amenity FF&E — dining, salon, theater, therapy and common-area furnishings/fixtures | 5-year | Movable furnishings and non-structural decorative fixtures generally qualify; anything permanently integral to the building does not. |
| Site amenities & paving — courtyards, walking paths, landscape features, parking | 15-year | Qualifying land improvements are generally 15-year; the underlying land is never depreciable and the building shell stays 39-year. |
2Typical results and what drives the spread
Across standardized senior / assisted living configurations, the engine models an accelerated share of roughly 12–28%. A resort-style community with rich amenities, extensive grounds and a memory-care wing lands high in the range; a plain apartment-style facility with minimal common space sits lower. These are modeled ranges, not a promise for any specific building — see by the numbers.
3By the numbers (original data)
4What a study costs for this type
Study fees track building size, documentation quality and whether an on-site inspection is performed. See the pricing guide for current market bands; competitor fees are sourced there, not quoted in prose here.
5Provider comparison — the Top 5 for this asset class
Every provider below is scored on the same fixed rubric, weighting relevant senior / assisted living evidence most heavily. Facts are drawn from each provider's public materials and dated.
| Provider | Score* | Relevant senior / assisted living evidence | Profile | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| RE Cost Seg Engineering-first · National (Houston, TX) Best published pricing Best for virtual delivery Most transparent turnaround | 7.9How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| Cost Seg Smart site owner Engineering-first Best published pricing Best for virtual delivery | 7.8How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| Baker Tilly National accounting/advisory · National (Chicago, IL) Best for national on-site coverage Most transparent turnaround | 7.6How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| Source Advisors Engineering-first · National (Fort Worth, TX) Best for national on-site coverage | 7.3How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → | ||||||||||||||||||||||||||||||||
| Cherry Bekaert Engineering-first · National (Richmond, VA; #1 Southeast) Best for national on-site coverage | 7.2How this score is built (sub-score ÷ 5 × weight):
| Generic coverage only source · as of Jul 2026 | Profile → |
Top 5 of 22 firms scored for senior / assisted living. See every firm's full profile and per-type standing in the provider directory.
*Score is this site's published rubric output (0–10) for senior / assisted living, weighting relevant property-type evidence most heavily (see how we compare) — click any score for its build-up. It is not a customer rating and no reviews are used. Cost Seg Smart is the site owner and is scored on the same rubric.
6Is it worth it — break-even
With value spread across unit finishes, institutional systems and land improvements, a modeled reclassification of 12–28% of depreciable basis is a reasonable planning band — a market range, not a promise. Moving that share into 5- and 15-year pools brings deductions forward by years; on a facility with meaningful basis the benefit generally clears a study fee once basis reaches the low seven figures, deeper where bonus depreciation applies.
7Frequently asked questions
Is assisted living treated as residential or commercial property?
For depreciation the shell is generally 39-year nonresidential real property because of the care and services provided, not 27.5-year residential — but that's a facts-and-circumstances determination your tax advisor makes. Cost segregation works either way; it targets the components that come out of the shell regardless of how the building itself is classified.
Why is the modeled range lower than for a hospital or surgery center?
Because assisted living is care-and-hospitality rather than clinical. It lacks the dense equipment-serving infrastructure — imaging power, isolated OR power, piped gases — that pushes clinical facilities higher. Its short-life value is broad, coming from finishes and site work, but not as concentrated.
Do the resident-unit kitchens and cabinetry qualify?
Generally the non-structural finishes, unit appliances and casework reclassify as personal property serving the units, while the structural walls and permanent building systems stay 39-year. The line is fixture-and-finish versus structure, decided on the facts of each installation.
What about all the outdoor grounds and parking?
Qualifying land improvements — paving, walkways, courtyards, site landscaping features — are generally 15-year property. The land itself is never depreciable, so a study separates the improvements from the raw land value rather than lumping them together.
Does a memory-care wing change the analysis?
It can push the result up. Memory care adds wander-management, secured egress and often more clinical systems and generators, all of which lean toward short-life treatment. The more clinical the wing, the closer that portion of the facility behaves like skilled nursing.
Sources and authority consulted
- Hospital Corp. of America v. Commissioner, 109 T.C. 21 (1997)
- Rev. Proc. 87-56 (MACRS asset classes)
- IRS Cost Segregation Audit Techniques Guide (Pub 5653)
- Cost Seg Smart per-vertical component engine (modeled ranges + component authorities).
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