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Bonus Depreciation
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Standard depreciation deducts the asset’s value and any improvements against tax liability. For residential rental properties, depreciation is spread out over 27.5 years; for commercial properties over 39 years, it is deemed useful by the IRS.
Bonus depreciation is a form of accelerated depreciation that allows you to take 100% of the accelerated depreciation benefit and utilize it all in year one of ownership.
Bonus depreciation is scheduled to phase out through the end of 2026.
There are no plans for bonus depreciation in real estate after 2027.
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