Top Cost Segregation Study Companies

How to choose a cost segregation study provider

The IRS Cost Segregation Audit Techniques Guide describes what a quality study looks like: prepared by someone with engineering or construction cost expertise, based on a site inspection and documented in detail. Ask whether the provider follows that standard and who on staff holds the engineering or estimating background.

Ask for a sample report, how the firm handles bonus depreciation and partial dispositions, and what audit support is included. Coordinate with your CPA, since the timing of the study, passive activity rules and later recapture on sale all affect whether it pays off.

Be wary of low-cost studies built only from software estimates with no inspection, and of providers paid a share of the tax savings, which can bias the allocation.

What a cost segregation study costs and why

Most firms quote a fixed fee per property after a feasibility review. Some offer lower-priced desktop studies for small residential rentals, while full engineering studies with a site visit cost more and hold up better under review.

The fee depends on property type and size, the number of buildings, the quality of cost records, whether the property was purchased or newly built, and travel to the site. New construction with detailed contractor invoices is easier to segregate than an older purchase that needs estimating. A catch-up study for a property held for years, or a portfolio of many properties, changes the pricing. Ask what the fee covers, including the method change filing and audit defense.