What a cost segregation study costs, and why we will not take a percentage

The ranges

Residential studies generally start around $1,850 per property, falling substantially at portfolio volume. Commercial studies start around $4,900 and scale with size, complexity and record availability. A Form 3115 look-back adds from about $1,200. Portfolio programmes are quoted individually.

Every engagement is quoted in writing before work begins, after a free feasibility review that tells you the expected benefit.

What drives the number

Size and type. Square footage, number of buildings, and how component-dense the property type is. A restaurant takes longer than a warehouse of the same size.

Records. Complete construction documentation makes direct takeoff possible, which is faster and more precise. Reconstructing costs from published data takes longer.

Years involved. A current-year study is simpler than a look-back requiring year-by-year recomputation across a decade.

Access and travel. Site logistics, tenant coordination and multi-site portfolios.

Why not a percentage of savings

Two reasons, one professional and one practical.

Contingent fees tied to a determination of tax liability sit awkwardly under the practitioner conduct rules. More importantly, a firm paid on the size of the reclassification has a direct financial reason to push the number past what the evidence supports. That is exactly the posture that turns a routine study into an examination problem.

We quote a fixed fee for defined engineering work. The number lands where the evidence puts it.

Is the fee deductible?

Professional fees for a study are generally deductible as an ordinary and necessary business expense in the year incurred. Your preparer will confirm the treatment in your situation, including whether any portion should be capitalised.

What is included

The study, the site inspection, the asset detail, the report, the Form 3115 or Form 4562 schedules, direct support for your preparer through filing, and audit support if the return is examined. We do not charge separately to defend our own work.