CPAs vs Cost Segregators - friends or foes?

Question

This post is mostly for my tax professionals colleagues and for my cost segregators friends.

In 3 weeks (early November 2026), I am going to speak at the annual conference of cost segregation professionals. While my topic is technical (combining cost segregation with 1031 exchanges), I'm also planning to address the thorny issue of collaboration between CPAs and cost segregators.

I welcome my colleagues' suggestions on how to better coordinate between tax pros and cost segregators and eliminate occasional disconnect. Investors - feel free to chime in, as well. Please either comment here or reach out to me offline.

Sagiv O. · Answer

From the study side: what makes a report CPA-usable is the itemized 1245/1250/39-yr schedule with placed-in-service dates and a clean asset listing, plus a heads-up when something looks like a partial disposition. The studies that cause headaches always arrive as a single number with no backup. Would love to hear what you end up presenting at the conference.

Sean Graham · Answer

Definitely friends. I’m Sean, owner of Maven Cost Segregation, and we work alongside CPAs every single day. Good cost seg engineers don't replace CPAs, we just do the heavy lifting engineering and line-item schedules they don't have time or specialty to do. A solid CPA takes our report, plugs the numbers into your return, and gets you the tax savings. The best results always happen when we work together.

Aaron Zimmerman · Answer

Nice! I’d say let the cpa figure out the basis and the breakout between building and land. Thats probably my biggest gripe and then we have to redo the Numbers if the study has already been run.

Also - if cost seg providers are doing the 3115, have a standardized checklist. The one I primarily use has one and it’s very convenient.

Kasing Ng · Answer

Oh woah Michael thats so cool, congrats on the speaking slot. Nothing really I can suggest, you already know this better than I do. I think just from the CPA side the thing that seems to cause the most friction is just timing, getting looped in before the study is commissioned instead of after. The same study can land pretty differently depending on whether the investor can use the losses against their other income now, or is passive and carries them forward until the deal produces income or they sell. When the segregator and CPA talk early, that part goes a lot smoother. Would love to hear how it goes.

Michael Plaks · Answer

It definitely would be best to have a CPA assessment prior to commencing cost seg study. However, it is not always feasible. Investors are often under the (wrong) impression that cost seg must be done before the end of the year. And they may not even choose their CPA until later. So, they do cost seg in December and pick a CPA in February.

From a segregator's position, is he going to tell a prospective client: go find a CPA first and then come back to me? Of course not. They will most likely lose this prospect.

Diana Khan · Answer

@Michael Plaks, I think CPAs and cost segregation professionals are definitely better off working together. One thing I'd add is involving the real estate attorney when needed, especially if a 1031 exchange is part of the transaction. Having the purchase documents, closing records, and ownership information available early can help everyone work from the same information.

I'm a real estate attorney, broker, and investor based in Maryland, and I work with clients on property transactions, contracts, and ownership matters. I've seen how important it is for everyone involved in a transaction to communicate, especially when legal documents and financial decisions affect each other. Sometimes it's not about anyone doing something wrong. It's simply that each professional is working with different information.

I appreciate you bringing this up, @Michael Plaks. I like seeing professionals discuss ways to work better together because it ultimately helps the property owner. This connects closely with my work in real estate law, and I'd be happy to stay connected! Best of luck with your presentation!

Michael Plaks · Answer

A single number (or 3 of them) does not qualify as a cost seg study, in my book :)

CPAs vs Cost Segregators - friends or foes?

CPAs vs Cost Segregators - friends or foes?

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