Cost Segregation Study Cost and Pricing
Compare the total cost of a completed, implemented study, not just the price of a report. Start with AE’s published fee, then confirm the property-specific scope in writing.
AE Tax Advisors cost segregation pricing
$1 per square foot, with a $2,000 minimum per study. This is AE's published standard pricing, not an industry-wide average. Complex or specialized work may be quoted separately. Confirm the square footage used for billing and the final scope before work begins.
- A 1,500-square-foot property reaches the $2,000 minimum.
- A 3,000-square-foot property has an illustrative standard study fee of $3,000.
- An 8,000-square-foot property has an illustrative standard study fee of $8,000.
These examples show the pricing formula only. They do not estimate deductions or confirm eligibility. Cost segregation is separate from the $7,800 Strategic Tax Advisory or $9,800 Complex Tax Advisory engagements. View all published service fees.
What should the proposal include?
Identify the property address, ownership entity, relevant tax years, acquisition history and improvements. A recently purchased single building and an older portfolio with multiple renovations have different records and reconciliation needs.
- Engineering and documentation: who performs and reviews the analysis, what records are required, and whether inspection or other documentation is included.
- Report: asset classifications, allocation of basis, depreciation schedules and supporting rationale.
- Implementation: who updates the return and asset register, and whether Form 3115 preparation or state adjustments are separately priced.
- Support: the scope and limits of report corrections, preparer questions and audit support.
- Timing: the deadline, dependencies, review steps and treatment of incomplete records.
AE's published study scope includes an engineering-based analysis and a supporting report. A catch-up calculation should not be mistaken for a commitment to prepare and file the method change or every related return.
Compare proposals using the same facts
Our guide to how much a cost segregation study costs includes fee examples and an editable quote comparison worksheet. Use the same property facts and list separately priced work when comparing providers.
Give each provider the same property details and ask them to state assumptions. If one estimate uses acquisition price including land and another uses depreciable basis, their projected percentages cannot be compared directly. The same is true when an estimate includes new renovation costs that another omits.
Ask for the total engagement cost, not a fee disconnected from return implementation. Confirm whether discounts, travel, additional buildings, amendments, state schedules or missing-record reconstruction change that cost.
Review AE's study process and deliverables before comparing proposals. Use the documents checklist to identify information a provider still needs.
How to evaluate whether the study is worth the fee
Evaluate incremental tax benefit relative to the depreciation available without a study. A projected deduction is not itself tax savings, and suspended deductions do not generate the same immediate cash result as currently usable ones.
For example, if a reviewed projection showed $12,000 of current incremental tax benefit and the combined study and implementation cost were $4,000, the initial net cash benefit would be $8,000 before later-year effects. This is arithmetic using hypothetical inputs, not an AE client result or a forecast for your property.
Model the holding period and eventual disposition as well. Accelerated deductions change timing, and future deductions or sale taxes can offset some of today's benefit. The calculator provides a limited first-year scenario; a full engagement should examine the broader facts.
When a low quote may become an expensive decision
A low report price is less useful if the basis does not reconcile, the return preparer cannot implement the schedule, or the proposed loss cannot be used. Conversely, a higher price does not establish better quality. Compare the documented work and accountable deliverables.
Be cautious about choosing a provider solely because its forecast has the largest reclassification percentage or because it promises that the report is IRS-approved. Ask for the basis of the classification and the specific support promised under the engagement.
Frequently Asked Questions
Is $2,000 the fee for every property?
No. It is the minimum under the published $1-per-square-foot formula. A larger property may have a higher fee, and complex work may be quoted separately.
Does the advisory fee include the study?
No. The website prices cost segregation studies separately from Strategic and Complex Tax Advisory.
Does the cheapest study offer the best return?
Not necessarily. Compare the fee, report quality, implementation responsibilities, usable deduction and expected holding period together.
Can a previously acquired building be quoted?
Yes, a lookback review can be scoped, but the original service dates, prior asset schedule and improvement history are needed. Confirm any additional reconciliation and filing work.
Related Reading
Talk Through Your Situation
Every situation turns on its own facts. Schedule a discovery call and we will walk through what applies to you, what it is worth, and what it would take to put it in place.
Compare written scope before comparing the headline fee
A useful price comparison lists the property, assets, tax years and deliverables covered by each proposal. A study quote and a return-preparation quote solve different parts of the project. Confirm whether prior depreciation reconciliation, Form 3115 preparation, owner-level loss analysis, state adjustments and responses to later questions are included or separately billed. Cost segregation is separately priced from AE tax advisory; the signed engagement controls the work.
Illustrative decision
Suppose Proposal A covers the report only while Proposal B also includes a preparer handoff and a prior-year schedule reconciliation. Comparing the two prices without assigning those remaining tasks can understate the total project cost. Ask both providers to complete the same scope list rather than assuming that a longer report includes more implementation.
Records and decisions to prepare
- Identify the property and square footage used in the quote
- List report, tax filing and advisory work separately
- Confirm additional-property and revision charges
- Record who handles questions from the return preparer
Primary references for this decision:
- IRS cost segregation audit technique guide
- IRS Publication 946: depreciation methods and eligibility
- IRS Publication 551: basis of assets
Examples illustrate decisions, not guaranteed outcomes. Apply the rules for the relevant tax year and review the underlying facts before filing.
Cost segregation decisions · Browse owner tax decisions · Editorial standards
Explore the cost segregation planning process
Use AE Tax Advisors' cost segregation resource center to compare study scope, pricing and implementation. For property records and study deliverables, review Stratum Cost Segregation's study resources. Stratum focuses on the property analysis; AE leads the broader tax strategy discussion. Confirm responsibilities and fees in your written engagement.
Pricing for an engagement versus budgeting for a study
This page describes AE’s published study pricing and the scope to confirm in a proposal. For the factors that change a study budget and questions to ask any provider, read the study-cost budgeting guide. Compare cash-flow assumptions before ordering.
Questions to ask before engaging AE
What information is needed for a cost segregation quote?
Prepare property type, measured square footage, ownership, purchase and placed-in-service dates, improvements and prior depreciation records. Identify your filing deadline and requested implementation work. Review the details.
Does the quoted study fee include Form 3115 and tax return work?
Do not assume it does. Ask the proposal to identify correction analysis, filing preparation, federal and state return implementation, and support with separate fees where relevant. Review the details.
Practical review: how much does a cost segregation study cost
A cost segregation quote should tell you what you are buying, who will complete the work, and what happens when the report is finished. The study price is only one part of the decision. An inexpensive report can become an expensive engagement if the tax-return work is excluded and no one has agreed to implement it.
AE's published study pricing is $1 per square foot with a $2,000 minimum per study. Cost segregation is separately priced from advisory. Your written proposal controls the property scope and any additional work. See the current cost segregation service page.
Compare the complete engagement
Ask each provider to price the same property and deliverables:
| Work | Question to resolve |
|---|---|
| Property study | Which buildings and improvements are included? |
| Prior depreciation review | Will the report reconcile to my existing schedule? |
| Catch-up calculation | Is the calculation included if prior returns are involved? |
| Return implementation | Who updates the depreciation records and prepares any filings? |
| State analysis | Are federal and state differences addressed? |
| Later questions | What support is included if my preparer needs clarification? |
A quoted catch-up calculation does not establish that Form 3115 preparation and filing are included. Put those responsibilities in writing before accepting the proposal.
Test value using an incremental benefit
Ask for a comparison with the depreciation you would claim without the study. If an illustrative model shows $18,000 of current federal tax reduction and a $4,000 total study-and-implementation cost, the initial difference is $14,000. That simplified subtraction excludes state effects, future tax consequences, and the timing of payment. It is a screening exercise, not a property estimate.
If the deduction cannot be used now, the current benefit may be much smaller. Review deduction usability and planning before deciding a quoted deduction justifies the fee.
What to send for a useful quote
Start with the property type, square footage, purchase date, service date, ownership entity, renovation history, and expected sale date. Identify whether the property has an existing depreciation schedule or came through an exchange. Explain what help you need after the study.
You should leave the comparison with a defined scope, a total proposed cost, and a named party responsible for implementation.
Comparing cost segregation service providers
Request comparable quotes using the same property records. Compare methodology, input verification, report review, questions from your preparer, and included filing assistance. A lowest advertised study price does not establish the correct service for every property.
Use the tax advisor buying checklist and compare provider pricing and quote scope.
Move from a published rate to a property-specific scope
Compare the study fee and quote-scope guide with the work your property needs. Bring square footage, purchase and placed-in-service dates, closing records and existing depreciation schedules. Ask the team to identify study work, return implementation and any separately priced work in the written quote.