100% Bonus Depreciation in 2025+
Back in 2019, I invested in a multifamily deal and walked away with a $180,000 tax loss on my K-1. I didn’t flip the property, swing a hammer, or manage a single tenant.
What I did do was invest with the right sponsor, in the right structure, at the right time—with 100% bonus depreciation in play.
Now in 2025, that tax strategy might return for a limited window. And if you’re a high-income professional or experienced LP, this is a heads-up: don’t miss it.
The Setup: Bonus Depreciation 101
When you buy a rental property, the IRS lets you depreciate the building over time—typically 27.5 or 39 years. But bonus depreciation lets you front-load those deductions if you break the asset into parts using a cost segregation study.
When 100% bonus depreciation is available, you can write off ~25–40% of the building’s value in the first year. That’s a game-changer, especially if you’re a passive investor with sizable income.
Here’s what that looked like for me:
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Investment: $300,000 in a syndication
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Bonus depreciation: $180,000 passive loss
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Result: Offset major tax burden—completely legal
What’s Changing in 2025?
Bonus depreciation started phasing out after 2022. It’s down to 60% now—and headed for 40% in 2025.
But there’s a proposed tax bill in Congress to bring 100% back for one year only. The catch?
Your property must be placed in service by December 31, 2025.
That means you (or your sponsor) need to:
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Close the deal
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Do a cost seg study
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Get everything operational
If you wait until Q4 2025, it might be too late. Engineers are fully booked. Lenders slow down. I’ve seen investors miss this window before—and it can cost six figures.
A Cautionary Tale (Real Story)
One of our newer LPs had a $300K capital gain in 2022. She rushed into a deal in Q4 thinking she’d get the write-off. But the deal didn’t close until January. Her CPA had to break the bad news: no 2022 deduction.
She paid an extra $120K to the IRS that year.
The part of this that just like anything is there's risk in, but I at least arm yourself with the historical numbers below:
3 Investor Mistakes to Avoid in 2025
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Assuming your sponsor handles it
Ask directly: “Are you planning for 100% bonus depreciation?” If they don’t have a timeline or cost seg plan, move on. -
Waiting too long to invest
Good deals get gobbled up early. Q2 and Q3 are your sweet spot to get placed-in-service by year-end. -
Not coordinating with your CPA
Passive losses are powerful—but only if they offset the right income. Make sure you understand how they apply to your situation.
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