Playground equipment is 15-year land improvement property. Security systems, kitchen infrastructure, and safety systems are 5-year. Most child care owners have never studied any of it.
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Child care facility owners are among the most overlooked beneficiaries of cost segregation — and the most surprised when they discover how much their building holds in accelerated deductions.
The safety systems are the starting point. Emergency lighting, security cameras, access control, and fire detection beyond standard building requirements all qualify for 5-year personal property treatment. In a licensed facility with extensive camera coverage and full access control, this infrastructure represents meaningful first-year deductions.
The specialized equipment layer adds to it: commercial kitchen infrastructure for meal preparation, intercom and classroom communication systems, and specialized plumbing all qualify for accelerated treatment.
Outdoors: playground equipment qualifies as 15-year land improvement property. The equipment pads, perimeter fencing, drop-off paving, and site lighting add to the 15-year total. For a purpose-built child care facility, the cost segregation opportunity is consistently larger than owners expect.
These are the IRS-verified asset classes under Rev. Proc. 87-56 and supporting case law — confirmed across 16,000+ studies. Every component is documented to its correct recovery period with engineering justification, defensible under IRS examination.
Cost Seg America engineers child care facility cost segregation studies with full analysis of the safety systems, commercial kitchen infrastructure, and outdoor improvements that characterize a licensed child care facility. Playground equipment is 15-year land improvement property. Security camera systems and access control are 5-year personal property. Commercial kitchen infrastructure is 5-year process equipment. Our engineering team counts every component across the entire property.
The IRS publishes a 347-page Audit Technique Guide on cost segregation. It identifies Approaches 1 and 2 as the preferred methodologies. Studies priced under $2,900 recover $60,000–$150,000 less per $1 million of depreciable basis than a fully engineered study. Cost Seg America has used IRS Approaches 1 and 2 on every study for 24 years. 125+ IRS audits. Zero losses. $0 ever returned. The methodology is why.
Cost segregation is an IRS-approved engineering analysis that reclassifies components of your day care property from the default 39 yr straight-line depreciation schedule to three shorter recovery periods: 5-year personal property, 7-year personal property, and 15-year land improvements. Every component that qualifies for an accelerated schedule is individually identified, measured, and documented.
With 100% bonus depreciation active under OBBBA for property placed in service after January 19, 2025, every qualifying 5-year, 7-year, and 15-year component can be fully deducted in Year 1. Cost Seg America consistently recovers $60,000–$150,000 more in deductions per $1 million of depreciable basis than studies priced under $2,900.
The typical reclassification rate for day care is 25–35% of the depreciable basis. On a $2.5M property, this translates to approximately $222,000 in Year 1 federal income tax savings at a 37% rate. Actual results vary based on the specific property, construction type, and individual tax situation.
The One Big Beautiful Budget Act (OBBBA) restored 100% bonus depreciation for qualified property placed in service after January 19, 2025. With 100% bonus depreciation, every qualifying 5-year, 7-year, and 15-year component identified in your study is fully deductible in the year you place the property in service. Your CPA determines your eligibility based on your individual tax situation, passive activity rules, and other factors.
Yes. The IRS allows you to go back and claim deductions you never took on prior-year properties using a Form 3115 change in accounting method — without amending previous returns. The catch-up deductions are taken entirely in the current tax year. Cost Seg America applies lookback analysis as standard practice. We partner with a trusted CPA specialist who handles the Form 3115 filing.
Cost Seg America's minimum qualifying property value is $200,000. Below this threshold, the engineering cost typically exceeds the tax benefit. Above $200,000, the fee-to-benefit ratio is consistently favorable and grows substantially with property value.
Unlimited audit defense means if the IRS examines your cost segregation study — this year, five years from now, or ten years from now — Cost Seg America responds. Written responses and phone representation. No time limit. No hour cap. No additional fee. Ever.
In 24+ years and 125+ IRS audits, Cost Seg America has never lost an audit and has never returned a dollar to the IRS.
Cost Seg America doesn't just find the deductions — we document them to survive the most demanding IRS examination.