Taking out 401k to buy rental. 100% depreciation

[Bobby Shell]

Listening to Robert K (Rich Dad) and his partner Tom Wheelwright they said you can take money out of your 401k and take the penalty, but then buy a rental and depreciate it the first year to offset the loss where you end up paying no taxes.

Does anyone have proof of this or can you debunk it? I am going to talk to my tax professional but wanted to open up the conversation and hear if the community has experience with this new tax law.

Thanks!

[Natalie Kolodij]

Originally posted by @Bobby Shell:

Thanks everyone. We have the cash now for one rental we are currently on the hunt for, but was really hoping to rope in a second. I meet my cpa next week and will look more.

Apparently with the new tax law according to different podcasts I have been listening too you can depreciate a property year one for 100%. Maybe I did not understand and they were overhyping. I figured I had to ask to know for sure. Appreciate your feedback

This is talking about Bonus depreciation. 

It's only applicable on property with a life of 20 years or less. 

Residential rentals are over 27.5, commercial over 39 

There are some things you can break out over shorter spans on a residential rental (appliances, carpet, window treatments, driveways) OR if your property is large enough to warrant a cost segregation you are separating out way more to depreciate on a shorter span thus qualifying it for bonus. 

But by and large, most of your normal residential rentals won't qualify.