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Updated almost 5 years ago on . Most recent reply

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Terone Johnson
  • Investor
  • Indianapolis, IN
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Bonus Depreciation on Rental Properties

Terone Johnson
  • Investor
  • Indianapolis, IN
Posted

Hi, for those here who own rental properties 1-4 unit residential, Are we able to use bonus depreciation when filing taxes on these assets? I was told that you are only able to depreciate These assets with their normal 27.5 year depreciation schedule. 

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Natalie Kolodij
  • Tax Strategist| National Tax Educator| Accepting New Clients
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Natalie Kolodij
  • Tax Strategist| National Tax Educator| Accepting New Clients
ModeratorReplied

You need a new accountant. 

Any thing with a life of under 20 years qualifies for bonus depreciation. 

A cost segregation separates as much as possible into 5 or 7 year assets which would definitely qualify. 

Even if you do renovations though it's important to note that a lot of things CAN'T be separate out on a rental without a cost segregation. 

If you do a $15k bathroom renovation just because you know the cost doesn't mean it can default to not needing to be capitalized. 

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Kolodij Tax & Consulting

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