Before You Buy a Cost Segregation Study, Ask These 5 Questions.
Quick answer: A useful proposal should connect the property analysis to your tax situation and future plans.
You bought a building and received an offer for a study promising a large deduction. Before comparing numbers, compare the underlying work. This checklist is designed to make the first conversation more useful and to help your existing tax professional participate in the decision.
1. Which property facts are needed?
Prepare the acquisition or construction information, placed-in-service dates and available cost records. Ask what the provider needs to understand the property and what work is included in the study. If your records are incomplete, explain the gaps. A headline property price is a starting point for a conversation, not a complete analysis.
2. What does the study actually deliver?
Ask about the report, supporting schedules, technical approach and the people responsible for the work. Request a description of how the result can be used by your return preparer. In a hypothetical comparison, one proposal might include a site inspection and detailed support while another excludes those tasks. Decide based on the relevant scope, not only the presentation quality.
3. Can the proposed deduction help in my situation?
Cost segregation concerns identifying property components and their depreciation treatment. Ask your adviser to explain how the proposed classifications, applicable depreciation rules and your tax circumstances affect any benefit. Do not equate an accelerated deduction with a tax credit or assume a deduction has the same value for every owner.
4. What are the full fees and follow-up costs?
Request the fee, payment terms, excluded services and treatment of later questions. Ask whether your accountant’s implementation work is included. Build a simple comparison showing study cost, tax-preparer work and unresolved assumptions. Any benefit illustration should identify its assumptions rather than presenting a guaranteed outcome.
5. How does this fit my future plan?
Tell your adviser if you expect to sell, refinance or substantially change the property. Ask how a future sale and possible depreciation recapture should be considered. A decision can look different when evaluated over several years rather than only the current return.
Keep the proposal in context
Bring the study proposal to your existing professional before signing. Ask for a plain-language explanation of why the work may or may not be worthwhile. If the provider cannot explain the scope and assumptions, seek clarification or compare another proposal.
Your next step
Use the cost segregation guide to prepare questions for your accountant and an appropriately qualified property specialist. This site’s ETS referral form is for R&D, so it is not the next step for a property study.
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Sources and editorial notes
IRS primary-source reference. Sources checked October 8, 2026. Examples are hypothetical; people shown are AI-generated illustrations, not clients or endorsers. This article provides general education and has not been represented as reviewed by a tax professional. Eligibility and outcomes depend on your facts and current rules.