100% Bonus Depreciation Is Back: What Investors Need to Know

100% Bonus Depreciation Is Back: What Investors Need to Know

Keywords: bonus depreciation 2025, real estate tax strategy, cost segregation, tax planning real estate

When the One Big Beautiful Bill Act (OBBBA) passed, one of the most powerful tools came roaring back: 100% bonus depreciation.

As a CPA and real estate developer, I’ve used this tool personally and for clients to drive massive tax efficiency—and now it’s back on the table permanently.

What Is 100% Bonus Depreciation?

Bonus depreciation lets you write off the entire cost of qualifying assets in the year you place them in service. For real estate, that means you can often deduct 20% to 30% of a property's purchase price in year one—if you perform a proper cost segregation study.

What’s Changed in 2025?

Under OBBBA:

• The bonus rate is now permanently set at 100%

• Applies to qualified improvement property, machinery, and equipment

• Effective for assets placed in service after January 19, 2025

Who Benefits?

• Active real estate professionals: You can use these losses to offset active and passive income.

• Short-term rental operators: May qualify for active participation rules.

• Passive investors: Proceed with caution. You’ll need proper grouping elections or RE pro status to unlock the full benefit.

What You Should Do

• Run a cost seg analysis on any new property.

• Confirm your tax profile allows you to use the losses now—not years from now.

• Strategically pair this with high-income years for maximum impact.

I’ve helped clients reduce their tax liability by six and even seven figures using this tool. It’s not hype. It’s tax law—if you know how to use it.