100% bonus let's go! 

Quote from @John Becker: Curious if anyone has come across research or data on how 100% bonus depreciation affects real estate prices.

Just wanted to throw this out here in case you guys haven't heard -- the House Ways and Means Committee just released their tax proposal and, as we'd hoped, they are fighting to bring back 100% bonus depreciation -- potentially retroactively for 2025!

My idea - can I basically get a cost seg study done on the other side of the building that I am not living in and use bonus depreciation (assuming it goes back to 100% this year) to accelerate tax write offs.

Assets in this category include:Structural components Building foundationRoof componentsBathroom fixturesPlumbing systemsHVAC central split systemFlooringCMU wallsCeiling constructionDoorsGeneral electrical componentsThis engineering-based cost segregation study used the following methodology:Physical site visit to identify and photograph property componentsExamination of architectural plans, accounting records and construction documentsA cost analysis employing engineering principles to allocate costs to specific asset classificationsDepreciation calculation using IRS-accepted methods, such as MACRSThe study also corrected a critical classification error, ensuring the property was treated as an STR with the appropriate 39-year class life and helping the owner remain compliant with IRS regulations.Reminder: bonus depreciation started to phase out in 2023.

Quote from @Charlie Green: Bonuses are always better than doing a penalty..

Working with a qualified intermediary is essential.Purchase A New Property and Do a Cost Seg StudyAnother potential option is to purchase an additional investment property and do a cost segregation study to offset the gains from the sale through bonus depreciation (if you qualify).Reinvest in Opportunity ZonesIf you invest your capital gains (including recapture) into a Qualified Opportunity Fund within 180 days, you may be able to defer the taxes until 2026.

This tax benefit is bonus depreciation.

Opened up the floor plan, relocated stairway, finished the bonus upstairs room, added all new HVAC, plumbing, electric.

The exchange must be done within a specific timeframe, but it can be a viable alternative when cost segregation isn’t the strongest option and you plan to sell your property.Bonus DepreciationWith bonus depreciation, you can deduct a large portion of a qualifying asset’s cost (assets with class lives of 20 years or less) in the first year you put it in service.In 2025, bonus depreciation is set at 40%, so you can deduct 40% of the asset’s cost right away.Strategic Improvements and RepairsCareful timing and classifying expenditures as improvements or repairs can impact your deductions.