The Bonus Is Back (Maybe)

US Federal politics might be appropriately described as legislative gridlock.

You can’t seem to get a single piece of legislation through the house and the senate on its own merits. These omnibus bills seem to get loaded up with dozens and sometimes hundreds of provisions, each one designed to amass the number of votes needed to get a majority vote in the House and the Senate.

The move to restore 100 percent depreciation took a step forward with the U.S. House's approval of the Tax Relief for American Families and Workers Act of 2024 last Friday.

For real estate investors, what the bill essentially says is that the 100% bonus depreciation is extended. Under the 2017 tax code, the bonus depreciation would have been calculated as 100% bonus depreciation in 2022, 80% in 2023, 60% in 2024 and so on down to zero.

Under the amendment, the 100% depreciation is extended until 2027. Not only that, the bonus depreciation is retroactively calculated at 100% for the year 2023 which just ended.

I recently did an interview with CPA Mike Pine from Pine & Co in Dallas. It’s an incredibly useful session on how to effectively use depreciation as part of your investment strategy. I’ve included a link to the video replay of that session with CPA Mike Pine HERE. So if you want to save a bucket load on your taxes, using the benefits of depreciation this particular session should help make the power of this tool pretty clear.

This piece of legislation is something that almost all real estate investors are going to want to follow closely over the next 30 days or so.

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Host: Victor Menasce

email: [email protected]