ELI5: Explain Like I'm 5

Cost segregation study

A cost segregation study is like playing a game of hide and seek with the money you spent on a property.

When you buy a property, like a house or a building, you usually have to pay a lot of money for it. To make sure you save money on your taxes, you need to know where all of that money is going.

A cost segregation study helps you find all of the money you spent on different things in your property, like the walls, the floors, the appliances, and the lights. By finding all of these things, you can tell the government which parts of your property can be used to save money on your taxes.

It's like if you and your friends built a big fort made of blankets, pillows, and chairs. When it's time to clean up, you can't just put everything in one pile. You have to divide everything up and put each piece where it belongs.

By doing a cost segregation study, you can make sure your money is going in the right spots and you're getting the most out of your property.
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