Bonus deprecitation, items that qualify

[Natalia Barriuso]

Does a new fence installation qualify for bonus depreciation? I am in the middle of a big renovation project and I am looking to maximize my bonus depreciation opportunities here. So far, I have kitchen, driveway, landscaping, and painting. Any suggestions would be appreciate it here. Thanks everyone. 

[Scott Roelofs]

@Natalia Barriuso the fence does count for bonus depreciation and don’t forget the disposal expense for the old property.

As for the qualifications for a loan, they are referring the the reduction of taxable income you are left with after the large depreciation deduction. This happens from time to time, but you are allowed, and recommended, to push back on the underwriter. To be accurate, they must exclude depreciation from the calculation as it’s a non-cash expense and doesn’t negatively effect cash-flow. If you aren’t comfortable pushing back, you can always ask them how depreciation is treated before getting into underwriting. There are plenty of underwriters that calculate this correctly.