Just Because 100% Bonus Depreciation Is Back Doesn’t Mean...

[William Thompson]

Just Because 100% Bonus Depreciation Is Back Doesn’t Mean Every Small Rental Needs a Cost Seg

I’m seeing a lot of investors hear that 100% bonus depreciation is back and immediately assume every smaller rental should get a cost seg study.

Maybe. Maybe not.

This is where I think a lot of people let the tax tail wag the dog.

Yes, cost seg can be a great strategy. But on smaller deals, I think the better question is not just, “How big is the write-off?” It’s, “Does this actually pencil out after the study cost, passive loss limits, holding period, and my long-term plan?”

That’s the part a lot of investors skip.

I’d rather see someone run the full math than chase a deduction just because the headline sounds exciting.

Curious where others land on this.
Are cost seg studies on smaller rentals being overused right now, or are investors still leaving too much on the table?