The Nick Huber Show Ep 189: Unlocking Tax Savings - What is Bonus Depreciation?
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Apr 8, 2025 Dive into the world of bonus depreciation, where savvy investors can deduct the full costs of certain assets like computers immediately. Discover how the 2017 Tax Cuts and Jobs Act has paved the way for even used assets to qualify. Learn about cost segregation techniques that help property owners maximize their deductions, especially in real estate. Hear a personal story of a storage facility acquisition that illustrates these tax strategies in action. This episode equips you with valuable insights to boost your tax savings!
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Understanding Bonus Depreciation
- Bonus depreciation lets businesses deduct certain asset costs immediately, unlike buildings' 39-year depreciation.
- Items with shorter lifespans, like computers or fuel, qualify for this immediate deduction.
Accelerated Depreciation for Building Components
- Not all building components depreciate over 39 years; some have shorter lifespans.
- Cost segregation identifies these components (HVAC, sidewalks) for accelerated depreciation.
Cost Segregation and Property Types
- Cost segregation categorizes building components as either personal property (1245) or long-life property (1250).
- This determines their depreciation timeline (5, 7, 15, 27.5, or 39 years).