Bonus Depreciation on Rental Properties

[Terone Johnson]

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. 

[Natalie Kolodij]

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.