Real Estate Tax Strategy Under the OBBBA: 5 Moves Smart Investors Are Making Now
Real Estate Tax Strategy Under the OBBBA: 5 Moves Smart Investors Are Making Now
Keywords: real estate tax strategies 2025, OBBBA real estate changes, investor tax planning, bonus depreciation
The One Big Beautiful Bill Act (OBBBA) wasn’t just a tax bill. It was a repositioning of the financial playing field for real estate investors, fund managers, and high-net-worth families.
I’ve read every line of this legislation, and here’s what I’m telling clients right now: if you don’t update your tax strategy this year, you’re either going to overpay… or miss your window.
Here are the five most important strategic shifts smart investors are making today.
1. Front-Loading Depreciation with the Return of 100% Bonus
This is the biggest gift in the bill for real estate.
Bonus depreciation is now permanent at 100%, meaning investors can write off a large portion of a property’s value in year one using cost segregation. For residential and commercial properties, that often means 20% to 30% of the purchase price is deductible immediately.
Who it helps:
Active investors and real estate professionals
Short-term rental operators
Passive investors who plan correctly with their CPA
This isn’t theoretical. I’ve helped clients write off six figures in year one by deploying this correctly.
2. Revisiting Opportunity Zones as a Long-Term Tax Shelter
With OBBBA, Opportunity Zones are now permanent and more flexible than ever. New zones will be designated every 10 years, and rural zones offer enhanced benefits like a 30% basis step-up after 5 years.
If you’re sitting on large gains from stock, crypto, or business sales, OZ funds offer:
Gain deferral
Basis reduction
Total tax elimination after 10 years
I’m actively helping clients structure OZ investments in small but growing towns—especially in underserved rural areas.
3. Structuring for Real Estate Professional (RE Pro) Status
This hasn’t changed—but it’s more important than ever.
If you or your spouse qualify as a real estate professional under IRS rules, you can use passive losses from real estate to offset active income—including W-2 or business earnings.
Most CPAs don’t understand how to structure this. We do. And it makes a difference of hundreds of thousands in tax savings.
4. Leveraging PTET to Bypass SALT Deduction Limits
The new SALT cap is more generous, but the smartest investors aren’t just relying on that. They’re using Pass-Through Entity Tax (PTET) strategies to bypass federal deduction caps altogether.
If your real estate or business income flows through an S-Corp or partnership, you can recharacterize your state taxes as business expenses—fully deductible at the federal level.
This strategy works best when:
You operate in a high-tax state (CA, NY, NJ, etc.)
You have $500K+ in taxable income
You own your entity structure or GP
5. Simplifying or Reinforcing Estate Strategy
With the estate tax exemption now at $15M per person, many clients are asking, “Do I still need all these trusts and layers?”
Here’s what I tell them:
If you’re under the threshold: Simplify
If you’re over: Reinforce now, before Congress changes the rules again
We help clients align their estate plan with their tax strategy, so they’re not surprised by liquidity issues or valuation mismatches down the road.
Final Word
OBBBA wasn’t perfect. But for real estate investors who know how to play the game, it opened up several major strategic advantages.
The investors I work with aren’t waiting until Q4 to ask their CPA what changed.
They’re acting now.
If you’re serious about maximizing what you keep this year, book a time. We’ll run through your structure, your opportunities, and what most people will miss.
