Cost segregation/bonus depreciation on house purchased midyear?

Cost segregation/bonus depreciation on house purchased midyear?

JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes

Hey all, yet another in the long line of cost segregation posts as our 100% bonus depreciation comes to an end :)

I'm going to key up a few of my go-to tax people here: @Natalie Kolodij @Linda Weygant @Amanda Han . 

I have a property that I purchased in the middle of this year that I am finishing a cost segregation on (a furnished STR) that was expensive enough that I hope to wipe out what will otherwise be a significant tax bill this year. I believe the bonus depreciation is going to get me there - but my question is this: will the bonus depreciation be reduced by the months I did not own the property/have it in service in 2022? I know that in years past my property purchases on the 27.5 depreciation schedule always seemed to be reduced in year 1 by whatever time frame it wasn't in service: i.e., a rental house put into service on October 1 only seemed to get me 25% of the regular depreciation credit for that year.

The property I bought this year went into service at the beginning of July so essentially 6 months of this year. Thanks all in advance!

Skyline Properties
View Page
1Reply
33 views

Most Popular Reply

Ashish AcharyaBusiness Member
CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
3y

Bonus depreciation is not prorated. You are good. 

INVESTOR FRIENDLY CPA®4.9242 Reviews
TaxMD® | Tax Planning Software
See this reply in the discussion

5 Replies

Jump to latestLatest
Join the conversationCreate a free account to reply, vote on answers and follow this thread.