344. Is a Condo or Single-Family Home Better for Maximizing Bonus Depreciation? (And More FAQ)

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Sep 10, 2025

The discussion dives into the nuances of bonus depreciation for condos versus single-family homes. Learn how renovations on older properties can still qualify for 100% bonus depreciation. Explore the complexities of converting personal residences into short-term rentals and when only partial benefits apply. The hosts also discuss the pros and cons of Form 3115, cautioning against DIY approaches. Additionally, they highlight the importance of professional tax assistance in navigating real estate investments.

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INSIGHT

Condos Often Produce Better Cost Seg Results

Condos often yield a higher percentage of bonus-eligible building components than single-family homes.
However, actual bonus depreciation depends on property specifics like pools or land improvements.

ADVICE

Get A Cost Seg Estimate Before Choosing

Request a cost segregation estimate to compare condo versus single-family purchase outcomes.
Use that apples-to-apples estimate to guide which property type better meets your bonus depreciation goals.

ADVICE

Bonus Depreciation Applies To 2025 Renovations

New renovations placed in service in 2025 can qualify for 100% bonus depreciation if they meet acquisition rules.
Talk to a cost segregation specialist or CPA to confirm which improvements qualify.

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In this episode of the Tax Smart REI Podcast, Thomas Castelli and Ryan Carriere, CPA, answer real investor questions from the investing community, tackling some of the most pressing topics around bonus depreciation, short-term rentals, and advanced tax planning. Tune in to learn: - How cost segregation results differ between condos, single-family homes, and properties with big-ticket land improvements like pools - Why new renovations on older rentals may still qualify for 100% bonus depreciation under the latest rules - The nuances of converting a personal residence into a short-term rental, and when only 40% bonus depreciation applies - The pros and cons of using Form 3115 to catch up missed depreciation—and why DIY may not be the best option - Key IRS rules around ADUs, STR participation, and what really triggers depreciation recapture This Q&A-style episode delivers practical answers to questions investors are asking right now in 2025. To become a client, request a consultation from Hall CPA, PLLC at go.therealestatecpa.com/3KSEev6 Get your FREE ticket to the 2025 Tax, Legal, and Wealth Summit: www.taxandlegalsummit.com/registration Subscribe to REI Daily & Enter to Win a FREE Strategy Call: go.therealestatecpa.com/41JuQBX The Tax Smart Real Estate Investors podcast is for general information purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Information on the podcast may not constitute the most up-to-date legal or other information. No reader, user, or listener of this podcast should act or refrain from acting on the basis of information on this podcast without first seeking legal and tax advice from counsel in the relevant jurisdiction. Only your individual attorney and tax advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained or mentioned within the podcast show and show notes do not create a relationship between the reader, user, or listener and podcast hosts, contributors, or guests. Any mention of third-party vendors, products, or services does not constitute an endorsement or recommendation. You should conduct your own due diligence before engaging with any vendor.