Assisted Living Facility Cost Segregation

Salas O’Brien conducted a cost segregation study on a newly constructed Assisted Living Facility, which uncovered significant tax-saving opportunities. The facility contains 56 assisted living units and 33 memory care studio units. Amenities include activity, entertainment, dining, conference rooms, a hair salon, laundry facilities, patios, and a large courtyard. The analysis reclassified assets from the standard 27.5-year depreciation period into shorter recovery periods. The study identified 20.45% of the property value as 5-year property, 2.13% as 7-year property, and 10.02% as 15-year property. This reclassification accelerated depreciation for 32.6% of the total $13,793,895.99 property value. By leveraging cost segregation, the facility owner can now enjoy increased cash flow in the early years of ownership. The study’s results allow for substantial tax benefits, enabling reinvestment in resident care, facility improvements, or other business ventures, ultimately enhancing the quality of service and profitability.