Why the Documents You Upload Are the Study
A cost segregation study is only as accurate as the cost data behind it. The IRS Cost Segregation Audit Techniques Guide is explicit on this point: the Engineering Approach (C.1 Actual Cost) — the most defensible methodology under audit — requires actual construction costs from source documents, not estimates.
Our platform's AI, Beverly, reads your uploaded documents and extracts every line-item cost, maps it to an IRS component category, and assigns the correct MACRS recovery period. The more precisely your documents capture what was built and what it cost, the more accurate and defensible your study becomes. Beverly is not guessing — she is reading your paperwork.
The good news: most property owners already have the three documents that drive 90% of the analysis. The ask is narrow on purpose.
The Three Documents That Matter Most
1. AIA Pay Applications (G702/G703 Forms)
If your project used a general contractor, the AIA Application for Payment forms — specifically the G702 cover sheet and the G703 Schedule of Values continuation sheet — are the most valuable documents you can upload. The G703 breaks the entire construction contract into individual line items by CSI trade division, with the dollar amount paid for each. This is exactly what Beverly needs: a trade-level cost breakdown that maps directly to IRS component categories.
Where to find them: your general contractor submitted these forms monthly throughout construction to request payment. Your project manager, owner's representative, or accounting department should have the complete set. If you can only find some of the draws, upload what you have — Beverly identifies which draws are present and reconciles accordingly.
What if you don't have them: contractor invoices, job cards, sworn statements, and draw requests all work as substitutes and belong in the same upload category. Any document that itemizes actual costs paid per trade qualifies.
2. Construction Drawings
Architectural, structural, and MEP (mechanical/electrical/plumbing) drawings give Beverly the context to classify components that the cost documents describe but do not fully identify. A G703 line that reads "Electrical — $180,000" is ambiguous; the electrical drawings resolve whether that cost covers tenant-serving panels and specialty circuits (5-year property) or general building service (39-year property).
Where to find them: your architect, general contractor, or project management firm maintains the construction document set. PDFs of the permit set are sufficient — you do not need full-size originals. Even a partial set (architectural only, no MEP) improves classification accuracy.
3. Trial Balance
For properties that have been on your books for any period of time, the trial balance is the most authoritative source for your depreciable basis. The account codes tell Beverly exactly how much has been capitalized in each IRS category — land, land improvements, buildings, and building improvements. When a trial balance is present, it takes precedence over all other cost sources for establishing the total basis.
Where to find them: your CPA or controller runs this from your accounting system (QuickBooks, Yardi, MRI, etc.). Ask for the trial balance as of the most recent fiscal year-end, exported to Excel. If you are ordering a study for a recently closed acquisition, the closing statement (below) substitutes for a trial balance.
One Optional Document That Frequently Changes the Numbers
Closing Statement or Settlement Statement
Every property acquisition produces a HUD-1 or ALTA closing disclosure. For acquisitions, this document establishes the purchase price paid, which becomes the starting point for your depreciable basis. More importantly, it often contains a land-versus-building allocation — and land is never depreciable. An accurate land allocation directly increases the basis available for cost segregation.
Where to find it: your closing attorney, escrow agent, or title company maintains this. For older acquisitions, it may be in your lender file or your original closing binder.
Photos: The Other Half of the Analysis
Document uploads handle the cost side of the study. Site photos handle component identification and condition. After you upload your cost documents, our platform walks you through a structured photo checklist — exterior, major systems (HVAC, electrical panels, fire suppression), finishes, and site improvements. These photos allow Beverly to verify component categories and flag anything the cost documents do not account for.
You can upload existing property photos or schedule a guided virtual site visit. Either approach works — the goal is visual documentation of what is physically on the property.
The Honest Summary
If you can locate your G703 Schedule of Values and a set of construction drawings, you have what Beverly needs to produce a high-quality, audit-defensible cost segregation study. Everything else improves the margin. Do not let the absence of optional documents delay the process — upload what you have and Beverly will identify any gaps that are worth pursuing before the study is finalized.
"The cost segregation study should be supported by documentation that substantiates the cost basis of each component... The most persuasive documentation is actual cost data from construction records." — IRS Cost Segregation Audit Techniques Guide, Chapter 6.4
