2023 Short-Term Rental Bonus Depreciation Update

[Arda Bircan]

You can still claim 80% bonus depreciation if you are looking to invest in Short-term rental properties this year.  In 2024, it will drop down to 60%.

To maximize your tax savings you will need to purchase a short-term rental property in 2023 and place it into service (rent it) in 2023 and materially participate in the management of that property.

If you can do that and meet one of the 7 material participation test then you can deduct your “losses” against your non-passive income (W-2,1099)

This is an unbelievable opportunity and incentives real estate investment.

[Julio Gonzalez]

Quote from @Zach Edelman:

I did not know it was dropping from 80% to 60%. Thanks for posting this!

In the H.R. 3936, Built in America Act, it was proposed to extend the 100% bonus depreciation until January 1, 2027. This has the potential to be passed later this year.