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100% Bonus Depreciation Could Return This Year: 2025 Tax Update
Mar 20, 2025
Join real estate tax expert Brandon Hall as he dives into thrilling tax strategies for property investors. He discusses the potential return of 100% bonus depreciation and how 2025 could reshape tax laws favorably for real estate. Hall reveals commonly overlooked tax write-offs and the benefits of opportunity zone investments. Get insights on the importance of precise cost allocation in maximizing deductions during property renovations. Whether you're seasoned or new to investing, this conversation is packed with invaluable tax wisdom!
30:28
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Quick takeaways
- The potential return of 100% bonus depreciation in 2025 could significantly benefit real estate investors by enhancing their tax deductions options.
- Investors should be aware of partial asset dispositions as a missed deduction strategy that can lead to unforeseen tax savings during property renovations.
Deep dives
The Impact of Bonus Depreciation
Bonus depreciation is expected to undergo significant changes, affecting real estate investors. Currently, the bonus depreciation rate stands at 40%, set to decrease to 20% in 2026, and eventually to 0% by 2027 unless legislative changes occur. This depreciation allows property owners to maximize their tax deductions by writing off a substantial portion of property components that have a useful life of less than 20 years. While the phasing out of bonus depreciation diminishes its immediate benefits, tax experts suggest that conducting a cost segregation study remains valuable for creating front-loaded tax deductions, regardless of the current bonus depreciation rate.
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