What does a cost segregation study cost on a $1M property, and what does it return?
$1,295 for a $1M house or short-term rental, $4,995 for a $1M medical office, and every other type in between — the fee tracks how much engineering the building takes, not the price. Modeled from our published reclassification bands, the study moves $128,000–$208,000 of a $1M purchase into 5-, 7- and 15-year property, all of it deductible in Year 1 under 100% bonus depreciation: $47,360–$76,960 of federal tax at the 37% bracket, or at least 11× the fee.
A cost segregation study on a $1,000,000 property costs $1,295 for a single-family or short-term rental and up to $4,995 for a medical office, delivered usually the next business day. Modeled on our published bands, it reclassifies $128,000–$208,000 into 5-, 7- and 15-year property — the Year-1 deduction with 100% bonus depreciation — against roughly $19,231–$29,091 of straight-line depreciation with no study.
Fee and modeled return by property type, $1M purchase
Each row takes a $1,000,000 purchase, removes the standard land share (20% residential, 25% commercial), and applies the representative reclassification from the band we publish for that type. The band itself is shown beside it, because a real study lands somewhere in the band, not on the point.
| Property type | Study fee | Depreciable basis | Reclassified (band) | Year-1 deduction, with study | Year-1, no study | Federal tax @ 37% |
|---|---|---|---|---|---|---|
| Single-family rental | $1,295 | $800,000 | 16% (5–32%) | $128,000 | $29,091 | $47,360 |
| Short-term rental (furnished) | $1,295 | $800,000 | 26% (19–39%) | $208,000 | $29,091 | $76,960 |
| Multifamily, 2–4 units | $1,795 | $800,000 | 18% (14–28%) | $144,000 | $29,091 | $53,280 |
| Office | $3,295 | $750,000 | 19% (16–29%) | $142,500 | $19,231 | $52,725 |
| Industrial / warehouse | $3,995 | $750,000 | 18% (15–28%) | $135,000 | $19,231 | $49,950 |
| Medical office | $4,995 | $750,000 | 19% (16–29%) | $142,500 | $19,231 | $52,725 |
Modeled figures. Reclassification is the representative point of the band published for each type on this site; Year-1 with a study is the reclassified basis under 100% bonus depreciation (IRC §168(k), property acquired and placed in service after January 19, 2025); the no-study column is one year of straight-line on the whole basis. Fees are the self-serve price for a $1,000,000 purchase from our pricing. State treatment varies — several states do not conform to bonus depreciation.
Why the fee spreads $1,295 to $4,995 at the same price
A $1M single-family rental is one dwelling: one kitchen, one set of flooring and fixtures, a driveway and a yard. The engineering is real but bounded, and the fee reflects that. A $1M office adds tenant build-outs, a parking lot with lighting and drainage, and building systems that split between structure and 5-year property. A medical office adds the specialty plumbing, gas, electrical and casework of clinical space on top — the most components to classify at this price, and the highest fee. The fee is therefore set by property type first and purchase price second; it is not a percentage of the deduction.
What you actually receive
A component-level study that follows the IRS Cost Segregation Audit Techniques Guide: every building and site component priced from nationally-recognized construction cost data, classified under Rev. Proc. 87-56 into its MACRS recovery period, with the year-by-year depreciation schedules your CPA drops onto Form 4562 — or, for a property bought in a prior year, the schedule behind a Form 3115 catch-up. See a full sample report for the deliverable page by page.
When a $1M property is not worth studying
When you cannot use the loss. A long-term rental's loss is passive unless you qualify as a real estate professional; a short-term rental's loss offsets W-2 income only with the 7-day rule and material participation. If neither applies and you have no passive income to shelter, the deduction carries forward rather than paying you this year — still worth having before a sale, but not an April refund. Selling within two or three years is the other case: depreciation recapture claws back part of the benefit, and a study bought for a quick flip rarely earns its fee. The worth-it test in full.
Frequently asked
Why does a $1M commercial building cost more to study than a $1M house?
The fee tracks the engineering, not the price. A $1M house has one kitchen, one set of finishes and a yard; a $1M office or medical suite has tenant build-outs, specialty electrical and plumbing, a parking lot and site lighting, each classified separately. Residential at this price is $1,295; office is $3,295; a medical office, with the most specialty systems, is $4,995.
What do traditional firms charge for a $1M property?
Engineer-led firms that send someone on site generally quote in the low-to-mid thousands up to $15,000 for a property this size, delivered in 4–8 weeks. Mid-tier providers with optional visits fall between. The study each produces follows the same IRS Audit Techniques Guide and Rev. Proc. 87-56 classification, so the difference is process cost and elapsed time, not what your CPA files.
Does a lookback study on a property I bought years ago cost more?
No. The fee is the same for a property placed in service in a prior year. The study produces the class-by-class schedule; your CPA files Form 3115 (automatic change DCN 7) to claim the missed depreciation as a §481(a) adjustment on one return, with no amended returns.
Are these deduction figures what my property will get?
No — they are modeled from the representative reclassification in our published bands, applied to a $1M purchase with a standard land allocation. A real study classifies the property's actual components, and the delivered result moves with age, finishes, site work and land value. Use the figures to decide whether a study is worth ordering, not as a promise about the outcome.