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Fee Options

Early cost segregation practitioners charged enormous prices; $20K to 50K per report. It still provided a good return. They were essentially attempting to convert a flat fee service into a contingency fee service. The IRS does NOT like cost segregation performed on a contingency basis because of the tendency to encourage the analyst to over-state the depreciation.

O’Connor has been a leader in providing reasonably priced cost segregation reports nationally. Back in the early 2000s we were charging fees of $5K when competitors were charging (and getting) fees of $20 to 50K. Our initial problem was our price was so low, that it did not seem credible to a national accounting firm offering the service at 10 times the fee. How could someone offer such a lower fee?

O’Connor has developed a fee schedule that is transparent and provides two primary scopes of work regarding the site inspection:

  1. includes a site visit by an appraiser or other cost segregation expert, and
  2. no site visit.

In cases where the client elects to omit the site visit, we ask for information such as a photos or video of the property, information on large improvements and details related to the type of building. The combination of video and direct communication with a person with good knowledge of the property allows us to identify most of the short-life property.

The trade-off is that without a site-visit, we may miss a bit of the short-life property, perhaps 5 to 10%. There are well over 100 items that are considered short-life property. The benefit of a site visit is we are more likely to identify all short life items.

Using video and interviews in lieu of a site visit is a reasonable compromise. You get the vast majority of the benefit for a much lower fee. In addition, our due diligence ensures the result is reasonable and does not grossly overstate the depreciation.

Bonus Depreciation / Cost Segregation Fee Options

Commercial/Multifamily Rental Houses
Includes On-Site Inspection $5,000+ (1) $750 to 1,500+ (2)
No On-Site Inspection $2,500 (3) $300 – $500 (4)
  1. Cost segregation reports including a site inspection typically start at $5,000. Complex properties are more expensive and there can be discounts for a group of properties.
  2. Typically $1,500 for a single property if a site inspection is included; discounts available for groups.
  3. Most commercial properties can be reasonably done for a fee of $1,500 if no inspection is required. It may not be appropriate for complex properties and discounts are available for groups.
  4. Discounts for more than 5 at one time.

The IRS wants three items from a cost segregation report:

  1. credible report
  2. credible result, and
  3. documentation of the results.

All 3 issues are addressed without a site visit but with information from the owner and a variety of other sources.
Don’t delay; check the cost segregation analysis to the right. If the results are promising, request a free preliminary analysis which will generally provide a result within 10% of the actual results.

We take all the risk out of the process. We are excellent at estimating the probable amount of short-life property in a building.

Our Guarantees:

  • If there are any questions from the IRS, we will handle it for you, working with your tax preparer.
  • If you do not reduce your income tax as a result of our cost segregation study we will reduce your fee.