Bonus Depreciation on Rental Property in 2026: A Year-End Planning Checklist
A rental property can help you build long-term wealth and may offer valuable tax benefits. As year-end approaches, the key is knowing what qualifies, what needs to happen before December 31 and how the purchase fits your financial plan.
Bonus depreciation on rental property in 2026 may allow eligible investors to claim certain deductions sooner. Working with your CPA and an experienced property team can help you understand the opportunity and coordinate the next steps.
SDIRA Wealth has helped investors build real estate portfolios since 2001. Today, the company works alongside investors’ CPAs, wealth planners and cost segregation specialists to connect property purchases with their broader financial goals.
“Our CPA and wealth partners love that we can offer their clients exclusive properties and opportunities in markets we select for job growth, population growth and rental demand,” says Josh Gilmore of SDIRA Wealth. “They can focus on the client’s financial plan while we help coordinate the property side.”
What bonus depreciation means
Current federal law generally allows 100% bonus depreciation on qualifying assets acquired and placed in service after January 19, 2025. Your CPA should confirm the rules that apply to your purchase.
For rental owners, this may include appliances, carpeting, furnishings and certain land improvements, such as qualifying fences and sidewalks.
The house itself generally follows a 27.5-year depreciation schedule. Land cannot be depreciated. Bonus depreciation applies to eligible components, rather than the entire purchase price.
How cost segregation helps
A cost segregation study identifies parts of the property that qualify for faster depreciation. Your CPA can use the study to determine which deductions apply to your tax return.
A well-supported study explains the classifications and documents the costs. The amount that qualifies varies from property to property.
A tax deduction reduces taxable income. It is not a dollar-for-dollar tax refund. Rental losses also do not automatically offset salary or business income. Your CPA should review whether you can use the deductions now, along with state rules and potential taxes when you sell.
Why closing before December 31 is not enough
To begin depreciation, a rental must be ready and available for rent. This is called being “placed in service.”
For example, closing in December on a home that will not be ready until January generally does not establish a December placed-in-service date. A completed home available for rent in December may qualify even if the first tenant moves in during January.
An advertisement alone does not make an unfinished property ready. Construction, required approvals and actual rental availability all matter.
A simple year-end checklist
• Talk with your CPA early. Review your expected income and whether the deductions would help your situation.
• Confirm the property timeline. For a calendar-year investor seeking a 2026 deduction, the property must be ready and available for rent by December 31.
• Coordinate the cost segregation study. Give the specialist and your CPA time to gather information and review the results before filing.
• Keep clear records. Save closing documents, land allocation support, invoices, the study and evidence of rental readiness, including dated photos, required approvals, listings and property manager updates.
• Review the investment itself. Consider financing, rental demand, expenses, vacancy and reserves alongside the potential tax benefits.
The current 100% bonus depreciation provision has no scheduled phaseout. The year-end deadline determines the tax year of the deduction; it is not the program’s expiration date.
How SDIRA Wealth helps
SDIRA Wealth helps coordinate property selection, financing, construction updates, closing, property management and the information needed for a cost segregation study.
With the investor’s permission, the team can work directly with their CPA and wealth planner to keep the property details and timeline connected to the financial plan. The CPA determines tax treatment, while the wealth planner considers how the purchase fits the investor’s broader goals.
The company’s construction volume and established relationships give individual investors access to exclusive properties, pricing advantages and ongoing support. Key benefits include:
• Exclusive properties: New construction rentals offered through SDIRA Wealth and unavailable on the MLS.
• Volume pricing advantages: Bulk purchasing and development relationships that support favorable pricing.
• Complimentary cost segregation reports: Available through the client program for the investor’s CPA to review.
• Discounted property management rates: Access to established management relationships and negotiated pricing.
• Financing options: A network of more than 200 lenders, plus available incentives and rate buydown opportunities.
• Free membership and team access: No SDIRA Wealth membership, team-access or buyer commission fees. Standard closing, financing and ownership costs still apply.
• Ongoing education and guidance: Workshops, property tours and support as investors continue building their portfolios.
“We’ve helped our clients save more than $250 million in taxes through real estate strategies coordinated with their CPAs and wealth advisors,” Gilmore says. “Our full-service experience brings the property, financing and support together. We then help guide clients after they buy as they continue building their portfolios.”
Start the conversation early
Year-end planning is easier when your property team and financial advisors have time to work together. Available benefits and financing terms vary by property and borrower.
Visit SDIRAWealth.com to become a free member or schedule a strategy call.
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