Industries » Child Care Centers

Cost Segregation for
daycare and child care centers

By using cost segregation for childcare buildings, you’re freeing
up income in the first few years of ownership, often when
investors are breaking even.

How a Cost Segregation Study Works for Child Care centers

Using a Cost Segregation Study for child care centers and daycares allows owners to free up income earlier in their depreciation schedule.

With a cost segregation study, owners can depreciate certain assets in their child care centers more quickly than the typical 39-year straight-line method.

Some assets eligible for cost segregation include interior finishes, cabinetry, and appliances. Any asset that does not compromise the structural integrity of the child care center can be fully depreciated over 5, 7, or 15 years.

Get a Free Projection for cost segregation from our team of cost segregation experts.

How to Tell if Your Property Qualifies For A Cost Segregation Study

Childcare building owners may qualify for a cost segregation study if they have done any of the following after 1985:

The strongest candidates for a cost segregation study are owners who have spent over $1 million on the property or over $100,000 in improvements. If you fall into this category, the benefits will greatly outweigh the cost.

Contact us for a free projection from our cost segregation experts.

How Do You Benefit From a Cost Segregation Study for Your Childcare Building?

By accelerating depreciation on certain building assets, owners of childcare properties can realize significant tax benefits many years sooner and maximize the value of their investments.

Cost Segregation Calculator

How much could you save on your childcare property?

Enter your property's cost basis below to see your projected tax savings based on NCSS completed studies.

Estimate your projected savings

Cost basis$5,000,000

$500K$50M

Total projected tax savings

$192,400

Projections are based on NCSS historical study data and assume a 37% federal tax rate. Individual results may vary.

What that includes

✓Ongoing IRS audit protection on every study, for life.
✓A custom-tailored, engineering-based cost segregation study from experts.
✓A guarantee of a minimum 5x return on your investment.
✓Free unlimited projections for life, any property, anywhere in the nation.

Get a free projection

Does a cost segregation study for child care centers change by state?

At National Cost Segregation Services, we are proud that our expertise serves every region of the U.S. A cost segregation study for child care related properties identifies assets that may be eligible for a shorter depreciation schedule under the IRS guidelines. A cost segregation study is based on federal tax law, which means it’s applicable in any state.

While the method of cost segregation is the same state by state, the result varies. Some states follow the exact federal depreciation rules, while others limit or adjust certain deductions. This means one owner may see one result on their federal tax return and a different result on their state return.

Because National Cost Segregation Services works with child care and daycare across the country, our studies are designed to support the federal depreciation strategy while providing your CPA with the detailed information needed to evaluate any state-level adjustments.

Do you have a question about what a cost segregation study looks like in your state? Talk to our cost segregation experts, and get a free projection.

Cost Segregation Case Study

Utah · Multifamily apartments

A multifamily property reclassified a significant share of its basis into 5-, 7-, and 15-year assets, accelerating first-year deductions and freeing up cash flow early in the hold.

See the full case study…

Industries that benefit from cost segregation

Short Term Vacation Rental

Industrial / warehouse

100% bonus depreciation is now permanent

The 2025 One Big Beautiful Bill Act permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025. Components with a depreciable life of 20 years or less may now be written off entirely in year one, not just for a single tax year, but going forward.

Can a Leased Daycare Buildout Qualify for Cost Segregation?

Often, daycare operators do not have the entire building for cost segregation to be worth reviewing. If the investor leases the space but pays for the facility buildout, those tenant-paid improvements may still be depreciable.

A tenant cannot claim depreciation on the landlord’s building, but they do have a basis in the building’s improvements, fixtures, equipment, and other costs that they paid for.

Not every buildout cost qualifies for accelerated depreciation. Some improvements may still be treated as nonresidential real property and depreciated over 39 years. The purpose of the study is to properly separate costs and create a more accurate depreciation schedule. A detailed cost segregation study from National Cost Segregation Services will ensure daycare owners maximize their tax savings.

The Five Guarantees of Cost Segregation Excellence at National Cost Segregation Services

We guarantee ongoing IRS audit protection on every study for life. If an IRS fine is issued due to any negligence on our part, we will pay the fine and give you $ 1,000.
We guarantee a quintuple return (5x) or more on your cost segregation study investment.
We guarantee a custom-tailored cost segregation study on your daycare or childcare building. Our engineering-based study will be tailored exactly to your commercial property. No ‘cookie-cutter’ approach.
We guarantee free unlimited projections for life. Any property in the nation.
We guarantee your Overall Satisfaction at the conclusion of your study, or we will make it right.

See what your property could save

Get a free projection from the nation’s leading cost segregation firm.

Cost Segregation for daycare and child care centers

By using cost segregation for childcare buildings, you’re freeing up income in the first few years of ownership, often when investors are breaking even.