The placed-in-service date is what drives eligibility.The IRS defines that as the date the property is ready and available for rent or business use — usually when you get your certificate of occupancy.

And you're right that since the property wasn’t placed in service until August 1, most of those pre-rental expenses (like renovations and improvements) are considered capital improvements and get added to your basis.But under Trump's new tax bill, certain components of your renovation (like appliances, light fixtures, and even some flooring or cabinetry) may qualify for bonus depreciation if they fall into a 5-, 7-, or 15-year property category under IRS rules. 

Its a buzz word, as opposed to a clearly defined strategy...

@Amber Stout It is important to note 100% bonus depreciation only applies to assets (building components and site work/improvements) with a class life of 20 years or less, not 27.5-, 31-, or 39-year assets (structural components) such as roofs, HVAC, fire protection and alarm, etc.

Not everybody can:https://www.biggerpockets.com/forums/51/topics/1121063-expla...Assuming that you can use more depreciation, here is a very generic snapshot of how your situation might turn out:- land: not depreciable at all- land improvements (fences, driveways, landscaping): 40% bonus- personal property (appliances, carpets, cabinets): 100% Section 179 or 40% bonus- the building itself: no bonus, slow depreciationIn order to break out the components I mentioned, you will normally need either a cost segregation study or a detailed breakdown from your builder, plus someone qualified to do the sorting.  

That means the lower the land value relative to the building and its components, the better.Example:•Property A: $500K total price•$100K land / $400K improvements → $400K depreciable•Property B: $500K total•$300K land / $200K improvements → Only $200K depreciableTip: Look for areas or property types where the improvement value is high relative to land — especially helpful in suburban or rural markets.Short-Term Rentals Open the Door to Bonus DepreciationIf your property qualifies as a short-term rental (STR) and you materially participate, you’re not bound by the traditional 27.5-year depreciation schedule.

That's the key component that is usually missing when I hear other entrepreneurs/investors say they don't like QBO.Something else to keep in mind is your entity structure and how your entities file tax returns.

The building components and systems that make up the building are the ingredients. 

That means:All prior depreciation is wiped cleanYour depreciation and cost seg will be based on the new FMV, not what the decedent paidCost Seg Timing Depends on Renovation PlansIf you do cost seg immediately, the FMV will be broken down into components as of the inheritance date — land improvements, personal property (5-, 7-, 15-year assets), and the main structure.If you wait until after renovations, those capital improvements can be added to basis, and your CPA can run a combined cost seg study.

If you don't have Schedule A, then you did not use itemized deductions in 2024, so you don't have this yardstick to measure against.Three components go into SALT:- state and local income tax you paid for previous year (in states with state income tax)- local sales tax on your last year's purchases (in states without state income tax)- local property taxes paid last year on your personal home(s)Notice that the first two of the three components are either-or: you can use the bigger of the two numbers, but not both.Also, there's a lot of important fine print when it comes to these deductions, and we're not diving into such details here.2.