What is Bonus Depreciation?

What is Bonus Depreciation in Real Estate?

Bonus depreciation in real estate is a tax incentive that allows property owners to immediately deduct a significant portion of the cost of qualifying assets, such as certain improvements or equipment, in the year they are placed in service, rather than depreciating them over their useful life. This can accelerate tax savings by allowing larger upfront deductions, though not all property types or improvements qualify, and the rules can change based on current tax laws. Bonus depreciation is often used for assets with a depreciation period of 20 years or less, like appliances or landscaping.