100% Bonus Depreciation is Back for 2025: A Guide for Real Estate Investors

The IRS just handed real estate investors a massive gift for 2025 and it’s time to unwrap it. As of January 20, 2025, 100% Bonus Depreciation is officially back.

If you’re a property owner, investor, or planning to buy real estate this year, this is your opportunity to supercharge your tax strategy, boost your cash flow, and build wealth faster than ever before.

Let’s break down what this means and how you can take advantage of it.

Key Takeaway

• Real estate investors can once again deduct 100% of qualifying property improvements in year one, significantly reducing taxable income and boosting cash flow.
• Pairing bonus depreciation with a cost segregation study allows investors to identify short-life assets and accelerate deductions unlocking tens or hundreds of thousands of dollars in upfront tax savings.

Table of Contents

• Key Takeaway
• What is 100% Bonus Depreciation?
• Why 100% Bonus Depreciation is a Game-Changer for Investors
• Real-World Example
• How to Take Advantage: Partner with CostSegRx
• Conclusion

What is 100% Bonus Depreciation?

Bonus depreciation is a powerful tax incentive that allows you to deduct the full cost of certain assets in the same year they’re placed into service—rather than depreciating them over 5, 15, or even 39 years.

Bonus Depreciation Phase-Out Timeline:

• 2023: 80%

• 2024: 60%

• 2025 (originally): 40% ❌

• 2025 (updated): 🎉 100% Reinstated!

Thanks to the One Big Beautiful Bill of 2025, investors can now fully expense qualifying property improvements acquired and placed into service after January 20, 2025.

Why 100% Bonus Depreciation is a Game-Changer for Investors

Typical real estate depreciation happens over 27.5 years (residential) or 39 years (commercial). But with 100% bonus depreciation and a cost segregation study, you can:

• Reclassify assets (e.g., flooring, lighting, landscaping) into 5-, 7-, and 15-year property.

• Deduct 100% of those assets immediately.

• Reduce your tax bill and increase your cash flow.

Key Benefits:

• Instant Tax Savings: Use depreciation to reduce or eliminate taxable income.

• Cash Flow Injection: Keep more money in your pocket today.

• Wealth Acceleration: Reinvest tax savings into more property, renovations, or debt reduction.

Real-World Example

Imagine you buy a $1.5 million short-term rental. A cost segregation study might identify $300,000 worth of components that qualify for accelerated depreciation.

With 100% bonus depreciation, you can deduct all $300,000 this year instead of spreading it out over decades.

That deduction could reduce your taxable income to zero or even create a loss that shelters other income.

How to Take Advantage: Partner with CostSegRx

At CostSegRx, we specialize in helping investors unlock powerful tax savings through engineered cost segregation studies.

Here’s what we do:

• We help you maximize depreciation benefits and reduce tax liability.
• Every study is backed by precise engineering and IRS-aligned methods.
• You’ll always work with expert who understands your unique goals.

Whether you’ve just bought a property or are planning a new acquisition, we’re ready to help you take full advantage of the 100% Bonus Depreciation of 2025.

Conclusion

The return of 100% bonus depreciation...is more than just a tax benefit—it’s a powerful catalyst for wealth-building.

This is the rare moment where smart tax strategy and aggressive real estate investing intersect. You can move now and come out ahead with lower tax bills, higher cash flow, and greater reinvestment power.