Massive Tax Savings for Real Estate Investors
Bonus Depreciation is back at former 100% availability for 2025 tax returns. That means buying real estate before the end of the year can help you shelter significant income and save thousands when you file in 2026.
Here’s how it works: almost any real estate purchase can be broken down into components that have shorter IRS “useful lives.”
- Residential properties are normally depreciated over 27.5 years.
- Commercial properties use a 39-year schedule.
But certain elements — like carpeting, fencing, roofs, HVAC systems, landscaping, and stormwater controls — wear out much faster. If those components have a useful life of 15 years or less, the IRS allows you to segregate (separate) them from the overall property.
Once separated, you can depreciate those items faster or even apply bonus depreciation to deduct 100% of their value in the first year.
For example, if the roof in your property represents $25,000 of value, you could deduct the entire amount on your 2025 return. That’s a powerful way to offset income and reduce taxes immediately.
Act Before Year-End
Cost segregation and bonus depreciation can be complex, so it’s important to work with a qualified accountant or tax professional. But the potential savings are immense — and the clock is ticking.
Message: Buy and close before year-end to take full advantage of the 2025 tax savings opportunity.
About the Author
Denise Evans is a commercial real estate broker and consultant. Although not a tax professional, her 15 credit hours of tax law from law school do still come in handy for recognizing valuable tools. With years of experience in property acquisition, management, and value-add strategy, she’s passionate about helping others build wealth through smart real estate investments.
