Tax deferring with cost seg.
A client of ours bought a ranch to use as a short term rental property in 2021 for $1.7 million.
After our engineers did a virtual site visit, they were able to assign a value of $347,000 into either 5-7-15 year assets that were eligible for depreciation.
In 2021, the bonus depreciation amount that you could take was 100%.
This means that the owner could immediately deduct the full amount of eligible property in the year it was placed in service, rather than depreciating it over time.
With that in mind, he took the full $347K deduction in his first year of ownership to offset taxable income from rentals.
This was roughly ~20% of his purchase price.
It was a big win for him.
As a reminder, the bonus depreciation rate in 2025 is back to 100%, it's still an incredibly valuable tool.