Where does Bonus Depreciation tax benefit fit into deal valuation?
I'm reading through "Real Estate by the Numbers" -- awesome book! As I'm modeling out my second STR, I look forward to taking advantage of 80% Bonus Depreciation for tax year 2023, and claim that against W2 income.
So let say I use 20% of the value of the home purchase price + improvements as a rule of thumb for the depreciation "loss" that i'll get back against my W2 in April 2024.
My question is: Where do I realize the value of that incremental federal refund check I will get in the mail in April 2024 for my 2023 purchase? Do I put it into an IRR calculation in April 2024? And do I have to account for the impact of the bonus depreciation on my cap gains when I sell the place, say in year 10 of the model?
I'm guessing there's a spreadsheet or blog or something out there that would help... I was kind of hoping it would be in the book. TIA!
(my first post, and just want to add that the biggerpockets community is amazing. 5 stars all around).