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Cost Segregation Basics

Cost segregation for CPAs: what to look for before you recommend a firm

A short due-diligence list for accountants whose clients are being pitched studies.

Deprecio 16 June 2026 4 min read

Ask who does the engineering

Not who signs the report — who walks the building and does the takeoff. If the answer is that nobody visits the property and the allocation comes from a model, you are looking at an estimate wearing a report's clothing.

Ask for the methodology statement

A quality report states which costing method was used and why: detailed engineering cost estimate from actual records, detailed engineering estimate from cost data, survey or letter method, residual estimation, or a sampling approach. The audit guide ranks these, and a report that will not say which one it used is telling you something.

Check the reconciliation

Total costed should tie exactly to the client's capitalised basis, with indirect costs allocated across components rather than dumped on the building. If the numbers do not tie, the schedule you are about to file does not tie either.

Check the citations

Each classification should have a stated legal basis. For personal property that generally means the tests from the investment tax credit regulations and the cases interpreting them. A list of assets with recovery periods and no supporting authority is not a study.

Ask about the fee structure

A contingent fee based on the tax outcome creates an incentive to push the classification. It also raises questions under the practitioner conduct rules. Fixed fees remove the problem.

Ask what happens on examination

Will they support the position, at whose cost, and for how long? A firm that charges separately to defend its own work has told you how confident it is.

What we give you

The study, the asset detail in a format that imports cleanly, the Form 3115 and section 481(a) computation where a look-back applies, direct answers to your questions, and support if the return is examined — all in the fixed fee. You keep the client relationship; we do the engineering. Most of our work arrives through accountants and stays with them.

Where this stops. This article is general information, not tax advice, and it cannot account for your basis, your entity, your participation or your state. A free feasibility review takes twenty minutes and gives you an answer specific to your property.

Book a feasibility call  Send us the property
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The study is one piece. We can handle the rest of the return.

Deprecio is part of the Shurek Accounting & Tax family of brands. If you want the study and the tax work under one roof — the return, the Form 3115, entity structure, quarterly estimates, multi-state filings — that is a single engagement, not a hand-off between two firms.

No-cost feasibility review

Find out what your building is hiding.

A feasibility review is free and takes about twenty minutes. Bring the closing statement and the depreciation schedule; we will tell you plainly whether a study pays for itself.

Book a 20-minute call