Bonus Depreciable Assets

What is Bonus Depreciation?

Bonus depreciation is a special tax incentive that allows real estate investors to immediately deduct a large portion of the cost of certain property or improvements in the year they are placed in service, instead of spreading the deduction out over many years.

Normally, commercial real estate is depreciated over 39 years, which means investors only write off a small fraction of the building's value each year. However, with bonus depreciation, certain assets tied to the property—such as qualified building improvements, furniture, fixtures, equipment, and even portions of land improvements like parking lots—can be depreciated much faster.

Important Note: Bonus depreciation rules and eligibility can be complex and change over time. Investors should consult with qualified tax advisors to understand how these provisions may apply to their specific situation.