The Nick Huber Show
Ep 147: What is Bonus Depreciation and Why Does it Matter?
Jun 3, 2024
Exploring bonus depreciation in real estate investing, the podcast discusses how it works, useful lifespans for components, and how it can offset other income. The episode also covers accelerated depreciation, cost segregation studies, and the importance of conducting studies for optimal tax benefits.
11:28
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Quick takeaways
- Bonus depreciation allows for immediate write-offs of short-life assets in real estate, offering significant tax benefits.
- Cost segregation studies allocate values for accelerated depreciation, maximizing tax benefits for various property components.
Deep dives
Tax Advantages of Real Estate
Real estate offers various tax benefits such as bonus depreciation, cost segregation, and 1031 exchanges, making it a highly tax-efficient investment option. Bonus depreciation allows for immediate deductions of expenses related to the property, while cost segregation breaks down assets into shorter depreciation schedules, enabling faster deductions. Furthermore, 1031 exchanges permit deferral of capital gains taxes by reinvesting proceeds from the sale of a property into another similar investment.
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