What documentation a study needs, and what to do when it does not exist

The essential set

Closing settlement statement. Current depreciation schedule or fixed-asset listing. Most recent filed return for the owning entity. Property address and legal description.

That is enough to start. Everything else improves precision.

The helpful set

Purchase appraisal, particularly any land versus improvement allocation. County property tax assessment showing land and improvement values. Title commitment or survey. Rent roll and leases, which reveal tenant-funded versus landlord-funded improvements.

If you built or renovated

Architectural, structural, mechanical, electrical, plumbing and site drawings. General contractor schedule of values. AIA pay applications, interim and final. Change order log. Subcontractor invoices or bid packages. Certificate of occupancy. Construction loan draw schedules.

This set is what enables direct takeoff, the most reliable costing method and the one the audit guide ranks highest.

When records do not exist

Extremely common, particularly on properties bought from a prior owner who kept nothing. It is not a blocker.

The method shifts to a detailed engineering estimate: the engineer takes off quantities from the physical building during inspection, prices them from published cost data adjusted for location, vintage and quality, and reconciles the total back to your actual capitalised basis so nothing is created or lost.

The report discloses the method used. Disclosure is what makes it defensible; pretending you had records you did not is what makes it a problem.

What the inspection recovers

A surprising amount. Panel schedules reveal dedicated circuits. Mechanical rooms reveal what serves what. Roof inspection reveals replacement vintage. Site observation quantifies paving areas, lighting counts, fencing runs and landscaping extent. Ceiling access reveals cabling and distribution.

This is why the site visit is one of the thirteen elements and why studies done entirely from documents are weaker.

Keep the report

The study supports depreciation for the life of the asset — up to thirty-nine years — and supports basis calculations on disposition after that. Store it with the permanent records for the property, not in the year's tax file. We keep a copy too, but the primary obligation is yours.