The short version

KBKG sells a study. AE Tax Advisors sells a tax plan that contains a study. That is the entire difference, and for large or complex properties it can cut either way.

KBKG is a national specialty tax firm with engineering staff, a long history in cost segregation, and adjacent practices in research and development credits, 179D and 45L energy incentives, and fixed asset review. It works extensively through CPA firms, which is how most of its studies originate, and it has the institutional weight and audit support infrastructure that large and complex properties call for.

AE Tax Advisors performs cost segregation studies with our own team at $1 per square foot with a $2,000 minimum. We are not primarily an engineering firm—we are a tax advisory practice that brought the study in house because the report is worthless if nobody implements it correctly.

For a $40 million industrial portfolio with complex components and a Big 4 audit relationship, KBKG is the more appropriate provider and we will say so plainly. For a residential rental, a short-term rental, or a small commercial building owned by someone who also needs the return filed, the economics point the other way.

Who KBKG is

KBKG is an established national provider of specialty tax services with offices across the country and dedicated engineering personnel. Cost segregation is a core practice, alongside R&D tax credits, energy incentives under Sections 179D and 45L, transfer pricing, and fixed asset and repair regulation studies.

A large share of its work comes through CPA firms rather than directly from property owners, which shapes the model: KBKG produces the technical study, and the client's own CPA implements it on the return. The firm publishes technical guidance and calculators used widely in the profession, and its studies are engineered, documented, and structured to withstand examination.

For large commercial, industrial, and institutional properties—and for anything where the component analysis is genuinely complicated—that engineering depth is the product you are buying, and it is a good one.

Who AE Tax Advisors is on cost segregation

We perform cost segregation studies in house for our advisory clients and for property owners who come to us for the study specifically. Pricing is $1 per square foot with a $2,000 minimum, and the deliverable is a full component breakdown allocating basis into 5-year, 7-year, and 15-year property under MACRS, with land improvements separated and structural basis identified.

The part that distinguishes the engagement is everything after the report. If the property has been held for more than one tax year, capturing the missed depreciation requires a Form 3115 change in accounting method with a Section 481(a) adjustment—we prepare it. If the resulting loss is passive under Section 469 and cannot be used, that has to be known before the study is commissioned, not after—we analyze it first. If prior returns should be amended, we amend them at $2,500 each.

Turnaround is typically measured in days rather than weeks because the analysis and the tax work happen in the same shop.

Side-by-Side Comparison

Comparison based on public materials as of 2026. Confirm current pricing and scope with each provider.
KBKGAE Tax Advisors
Engineering-based cost segregation study✔ Yes✔ Yes
Typical pricing modelQuoted per property$1/sq ft, $2,000 min
Best fit property sizeLarge / complex / institutionalResidential, STR, small to mid commercial
Tax return preparation included✘ No✔ Yes
Form 3115 prepared for you✘ No✔ Yes
Section 469 passive activity analysis✘ No✔ Yes
Real estate professional status planning✘ No✔ Yes
Prior-year amendment recovery✘ No✔ Yes
Entity structuring advice✘ No✔ Yes
Ongoing year-round advisory✘ No✔ Yes
R&D credits, 179D, 45L✔ Yes✘ No
Audit support for the study✔ Yes✔ Yes
Works through CPA firms✔ Yes● Partial
Typical turnaroundWeeksDays

Pros and Cons of Each

Every firm has a profile it serves well and a profile it does not. Here is an honest read on both.

KBKG

National specialty tax engineering firm

Strengths

  • Deep engineering bench and decades of cost segregation experience
  • Built for large, complex, and institutional properties
  • Adjacent specialties: R&D credits, 179D, 45L, fixed asset and repair studies
  • Established audit support and defense infrastructure
  • Widely used by CPA firms, including large national practices

Limitations

  • Study only—no tax return preparation or ongoing advisory relationship
  • Pricing is quoted per property and is typically well above per-square-foot boutique rates
  • Implementation depends entirely on your own CPA filing it correctly
  • Nobody in the engagement is checking whether the deduction is usable under Section 469
  • Often overkill for single-family rentals and small short-term rentals

AE Tax Advisors / Stratum

In-house cost seg inside a tax practice

Strengths

  • $1 per square foot with a $2,000 minimum—transparent and predictable
  • Fast turnaround because the study and the tax work sit in one team
  • Passive activity analysis done before the study, so you know the deduction is usable
  • Form 3115 and Section 481(a) catch-up prepared in house
  • Study feeds directly into the return we file and the plan we maintain

Limitations

  • Boutique engineering capacity—not the right choice for very large industrial or institutional assets
  • No R&D credit, transfer pricing, or 179D practice
  • We prefer to run studies inside an advisory relationship rather than as isolated transactions
  • Smaller brand recognition among large CPA firms
  • Not the cheapest option if all you want is a bare-bones report

Which One Should You Choose?

Choose KBKG if

You own large commercial, industrial, or institutional property, your component analysis is genuinely complex, or your CPA firm already has a relationship with them and will handle implementation competently. On big assets, engineering depth is worth paying for.

Choose AE Tax Advisors if

You own residential rentals, short-term rentals, or small to mid-sized commercial property, and you want the study, the Form 3115, and the return handled by one team. At $1 per square foot, the math on a typical rental is not close.

The question to ask first

Not "who does the best study" but "will this deduction actually be usable this year?" A perfect study on a passive loss you cannot deduct is an expensive PDF. Run the Section 469 analysis before you commission anything.

Why Clients Choose AE Tax Advisors

  • The study is scoped to the tax outcome. Before we run anything, we determine whether the resulting loss will be non-passive—through real estate professional status, the short-term rental exception, or offsetting passive income. If it will not be usable, we say so and you save the fee.
  • $1 per square foot, $2,000 minimum. A 2,400 square foot short-term rental is $2,400. Five properties at 1,600 square feet each are $8,000 total. Standalone engineering firms commonly quote $5,000 to $15,000 per property.
  • Form 3115 included. For any property held more than a year, the catch-up depreciation requires a change in accounting method with a Section 481(a) adjustment. We prepare and file it. An engineering-only vendor does not.
  • Days, not weeks. Because the analysis, the tax review, and the filing all happen in one team, we are not waiting on a vendor queue during the exact weeks that matter for a year-end acquisition.
  • The study is one input to a plan. Depreciation timing interacts with entity structure, reasonable compensation, retirement contributions, and disposition planning. We model those together rather than dropping a report on your desk.

Frequently Asked Questions

How much does a KBKG cost segregation study cost?

KBKG quotes per property based on size, type, and complexity rather than publishing a rate, and specialty engineering studies commonly run into five figures for commercial assets. AE Tax Advisors prices studies at $1 per square foot with a $2,000 minimum, which is published and does not require a quote.

Is KBKG a good cost segregation company?

Yes. KBKG is one of the most established specialty tax engineering firms in the country, with deep experience on large and complex properties and strong audit support. For institutional-scale assets it is a legitimate top-tier choice.

What is the difference between a cost segregation company and a tax advisor?

A cost segregation company produces an engineering report that reclassifies building components into shorter depreciation lives. A tax advisor determines whether those deductions are usable under the passive activity rules, files the Form 3115 required to claim catch-up depreciation on a property held more than a year, and puts the result on your return. The report alone does not reduce your tax.

Do I need Form 3115 for a cost segregation study?

If you place a property in service and run the study in that same tax year, no. If you have owned the property for more than one tax year, yes—claiming the missed depreciation requires Form 3115 with a Section 481(a) adjustment. Engineering-only firms do not prepare this form; your tax preparer must.

What is the best KBKG alternative for a rental property?

For single-family rentals, short-term rentals, and small commercial, the more common alternatives are AE Tax Advisors, RE Cost Seg, Cost Seg Smart, and CSSI. The tradeoff is engineering scale versus price and integration with your tax filing.

Can my regular CPA implement a KBKG study?

Usually, provided they are comfortable with Form 3115, Section 481(a) adjustments, and the passive activity rules. The common failure is a preparer who applies the reclassified basis but never files the accounting method change, which puts the catch-up deduction at risk.

Is cost segregation worth it on a small property?

It depends on basis and usability, not just square footage. As a rough screen, properties with a depreciable basis above roughly $200,000 where the resulting loss will be non-passive tend to clear the bar comfortably at $1 per square foot. Our free estimator will size it before you commit.

Keep Comparing

Disclosure: this page is published by AE Tax Advisors, so we are not a neutral party. We have tried to describe the other firm accurately and fairly using their own public materials, and we say plainly where they are the better fit. Firm details, service menus, and pricing change—verify anything that matters to your decision directly with the firm before you engage. Nothing here is tax advice for your specific situation.

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