One Big Beautiful Bill
In 2025 the bonus depreciation rate is back to 100% thanks to the One Big Beautiful Bill.
This means that if you bought a property for $1M in 2025, did a cost segregation study, and found $300K in eligible assets that you could depreciate, you could take 100% of that $300K as bonus depreciation in the first year.
You then apply that $300K to the owner’s personal tax rate to find the final amount that you can defer in year 1.
For example if your tax rate is 37%, you can defer $111K in taxes.
It's one of the best tax deals in the US right now.
Most Popular Reply
Yes. It is good news. If you deal all cash, it helps out.
Keep in mind that Real Estate is a Tax Shelter" because most people finance their acquisitions, yet you get to write off 100% of the cost of the asset. That is the "shelter" - no skin n the game, but you still get an expense.
The Bonus Depreciation rules were meant to help business owners who have to pay full price for assets, but were penalized by forcing MACRS and other mandatory depreciation regimes upon them.
Recapture exists. That is why God and Congress invented §1031 to defer gain recognition.
Keep in mind that Real Estate is a Tax Shelter" because most people finance their acquisitions, yet you get to write off 100% of the cost of the asset. That is the "shelter" - no skin n the game, but you still get an expense.
The Bonus Depreciation rules were meant to help business owners who have to pay full price for assets, but were penalized by forcing MACRS and other mandatory depreciation regimes upon them.
Recapture exists. That is why God and Congress invented §1031 to defer gain recognition.