Study Fees, Documents and Provider Due Diligence
Answers to five connected questions about study fees, documents and provider due diligence. Review IRS sources, practical facts, records and filing responsibilities.
The decision this guide resolves
Evaluate the report and filing implementation together. A study quote that excludes return work is not directly comparable to an all-inclusive project.
A practical fact pattern
Two vendors quote different prices, but only one explains basis reconciliation and the tax preparer handoff. Compare scope before deciding which is less expensive.
Records to gather before deciding
- Written scope, property details and fee proposal
- Sample report, methodology and reviewer roles
- Preparer handoff and amendment or Form 3115 responsibilities
Frequently Asked Questions
How much should a cost segregation study cost?
Fees depend on property complexity, records, methodology and scope. Ask whether inspection, reconciliation, revisions and examination support are included. AE’s quoted study model is $1 per square foot with a $2,000 minimum, subject to written scope; return and method-change preparation must be confirmed separately.
What documents should I send for a look-back study?
Start with the original closing statement, land allocation support, all depreciation schedules, improvement invoices, plans and available photos. Include prior elections and ownership changes. Send sensitive records through the provider’s secure intake rather than public forms or ordinary comments.
Does every study require an in-person inspection?
The appropriate methodology depends on property facts and available documentation. Ask how the provider identifies quantities, condition, use and costs, and what limitations a remote approach creates. An inspection by itself does not establish a correct tax classification or guarantee IRS acceptance.
What does audit support actually include?
Ask whether support covers report explanations, information requests, technical responses, representation, legal fees or only a short vendor call. Define the responsible professional, duration and additional costs in writing. A promise of audit support is not an assurance no examination or adjustment will occur.
Who puts the report on my tax return?
The engaged return preparer must reconcile and implement the report using the proper schedules, elections and correction procedure. The study provider may supply calculations without filing the return or Form 3115. Assign responsibility and deadlines before purchasing so a completed report does not sit unused.
How to turn the answers into a return decision
Write down the property owner, affected tax year, the factual test being used and the evidence supporting it. Reconcile the amount on the study or workpaper with the return schedule, identify any limitation and assign the filing task to a named preparer. If a fact is missing, resolve it before treating the estimated deduction as usable.
Continue the planning sequence
Reviewed sources and scope
Reviewed November 8, 2026 by AE Tax Advisors. This is a federal planning resource; the facts, tax year, elections and state rules control the actual return. IRS publications explain rules but do not replace applicable law. The cost segregation audit guide is nonbinding examiner guidance and predates later bonus-depreciation changes.
Bring the facts to a scoped review
A study estimates asset classifications; a tax review determines eligible and currently usable deductions. Ask who reconciles basis, prepares any Form 3115 or amended return, and implements the final schedules. No tax saving or investment outcome is guaranteed.
Cost segregation service and scope · Documents checklist · Advisory pricing
Talk Through Your Situation
Discuss your priorities, upcoming decisions and whether a study or advisory engagement fits. Detailed analysis, implementation or filing work follows an agreed written scope.