thinking commercial real estate? think fast.

warn clients: do the deal, get the cost seg study, and claim the bonus depreciation before it sunsets.

gonzalez: clients should act now, while the percentage of the allowed bonus depreciation is tipping in their favor.

by julio gonzalez
engineered tax services

julio gonzalez, founder and ceo of engineered tax services, has been named among the accounting today top 100 most influential people. gonzalez has been a pioneer in bringing specialized engineering tax studies to local cpa firms and mainstream america, which historically had only been available to fortune 500 through national accounting firms.  engineered tax services also owns the growth partnership, able: crm for accountants, and inside public accounting.

alas, the 100 percent bonus depreciation rule—the federal tax law under the tax cuts and jobs act (tcja) of 2017 that made it possible for taxpayers to write off a property’s reallocation in the year of acquisition—will begin to sunset at the end of this year.

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in its place in 2023, an 80 percent bonus depreciation will be allowed for properties acquired in 2023, scaling down to 60 percent in 2024 (for properties acquired in 2024), 40 percent in 2025 (for properties acquired in 2025), 20 percent in 2026 (for properties acquired in 2026), and then zero percent in 2027 and later years for properties acquired in 2027 and afterward.

it’s important to note for your clients in real estate that bonus depreciation is applied to a property based on the year it was purchased (although there are some exceptions to this rule). and taxpayers can only claim bonus depreciation retroactively within two tax years of the original placed-in-service date.