A few questions!

[Mariah Volk]

New to this, so please be nice :)

1. If we meet all of the requirements and choose to take bonus depreciation on an STR in 2024 (to take advantage of the 2024 40%), would recapture occur if we decided to change use in 2025? We are going to give it a try, but if we choose to either STR the property a bit with some personal use OR live in the property either some STR in 2025, does that trigger recapture or is it only on sale?

2. If the bonus depreciation amounts go up in the future again, can we capture the other 60% if we still meet the threshold? Or are you done with bonus depreciation?

- we are aware of the statutory requirements, just deciding whether the tax benefits would be worth it to us for the long term for a specific property - 

[Ben Trageser]

If you live in your short-term rental (STR) property in a future year after claiming depreciation, depreciation recapture does not occur immediately. Recapture typically happens only when you sell the property.

If you use the property partly for personal use and partly as a rental in a given year, depreciation and other expenses must be prorated based on the number of days it was rented versus personal use

Based on the current tax laws and regulations, once you've taken bonus depreciation on an asset, you cannot "capture" additional bonus depreciation on that same asset in future years, even if the rates increase.

In the 2024 tax year, the rate for bonus depreciation is 60%. That rate will be lowered further to 40% in 2025, and 20% in 2026. Bonus depreciation will finally be phased out in the 2027 tax year