A cost segregation study commonly costs a few thousand dollars, but a useful price comparison starts with the work included, not an unsupported industry average. AE Tax Advisors publishes standard pricing of $1 per square foot with a $2,000 minimum per study. Complex or specialized work may be quoted separately, and the signed engagement controls the final scope.
The fee is only one part of the decision. Property owners should compare the study cost with the incremental depreciation, whether the resulting deduction can be used now, state conformity, tax-return implementation fees, the expected holding period, and potential depreciation recapture. A large projected deduction is not automatically an immediate tax refund.
For a direct price answer and quote examples, read how much a cost segregation study costs. This budget guide focuses on the work to include in your total project estimate.
AE Tax Advisors Cost Segregation Pricing
| Property size | Illustrative standard fee |
|---|---|
| 1,500 square feet | $2,000 minimum |
| 2,000 square feet | $2,000 |
| 3,000 square feet | $3,000 |
| 5,000 square feet | $5,000 |
These examples show the pricing formula only. They do not estimate a deduction or confirm eligibility. AE primarily serves residential investment properties, Airbnb and other short-term rentals, long-term rentals, single-family portfolios, duplexes, and small to mid-sized multifamily. Very large commercial campuses and highly specialized industrial projects are not the firm's core engagement type.
What Should a Cost Segregation Proposal Include?
Ask each provider to identify the property, square footage used for billing, tax years, records required, analysis method, report deliverables, review process, and support after delivery. The proposal should also state who is responsible for updating the depreciation schedule and preparing any tax forms.
- Basis reconciliation: purchase price, land, closing costs, separately stated personal property, and later improvements should not be counted twice.
- Engineering-based classification: the report should explain the methodology, component costs, recovery periods, and legal support.
- Depreciation schedules: the deliverables should identify the classified assets and year-specific depreciation assumptions.
- Implementation responsibility: a report, a Section 481(a) catch-up calculation, and preparation of Form 3115 are related but distinct services.
- State treatment: states may decouple from federal bonus depreciation or require an addback.
- Support terms: confirm how preparer questions, revisions, and an examination are handled and priced.
Report Fee vs. Tax-Return Implementation Fee
Do not assume the study fee includes every filing step. A current-year property may require updates to Form 4562 and the fixed-asset schedule. A property placed in service in a prior year may require a separate accounting-method analysis and, when appropriate, Form 3115 with a Section 481(a) adjustment. The engagement should identify the responsible preparer and any separate fee before work begins.
How to Decide Whether the Study Is Worth the Cost
Start with depreciable basis after land. Estimate a property-specific range for shorter-life components, apply the correct bonus-depreciation rules for the acquisition and placed-in-service dates, and subtract the depreciation available without the study. Then test whether passive-loss, material-participation, basis, at-risk, or excess-business-loss rules delay the benefit.
For example, if a reviewed projection shows $12,000 of current incremental federal tax benefit and the combined study and implementation cost is $4,000, the initial net cash benefit is $8,000 before state and later-year effects. If the loss is suspended, the immediate benefit can be much smaller even though the deduction remains potentially valuable later.
Use the free cost segregation calculator to screen a range, then compare the result with the written proposal and your actual loss limitations.
How 100% Bonus Depreciation Affects the Analysis
Current federal law generally permits 100% bonus depreciation for eligible property acquired after January 19, 2025, subject to the statutory requirements and transition rules. Cost segregation can identify qualifying 5-year, 7-year, and 15-year property, but it does not make land or the building shell bonus-eligible. A lookback study must apply the rules and elections for the property's original dates rather than automatically using the current rate.
Questions to Ask Before Choosing a Provider
- What property and square footage does the quote cover?
- Who performs and reviews the engineering-based analysis?
- How will land, improvements, furnishings, and prior depreciation be reconciled?
- Does the fee cover the report only, or tax-return implementation too?
- Who answers questions from the return preparer?
- What happens if records are incomplete or the property changes before filing?
- What support is included if the IRS examines the depreciation classification?
Updated October 1, 2026. Pricing and examples are general information, not a guarantee of deductions or tax savings. Confirm the written engagement and your tax facts before proceeding.