Many have speculated that 100% bonus depreciation would be extended.
With enthusiasm, I can share that the Ways and Means Committee (the House of Representatives’ chief tax-writing committee), introduced the Build It in America Act.
The Build It in America Act starts to secure our supply chains to grow our economy. It incorporates several economic tax incentives, including 100% Bonus Depreciation and a correction to the Section 174A amortization that has impacted Research & Development Tax Credit.
If this were to pass, the Build It in America Act would extend 100% bonus depreciation through 2026. Versus the current plan of a 20% reduction per year (2023 is the 80% year).
This is fantastic for real estate investors who are addicted to Bonus Depreciation and its tax and cash flow benefits.
My clients need a boost of 100% Bonus Depreciation every year. While 80% Bonus is still a terrific tax benefit, 100% is better.
For those who file under Real Estate Professional Status (REPS), or for W-2 employees using the STR Loophole to offset ordinary incomes; this will extend the party through the end of 2026.
Hold the phone! Before you chill the champagne, it still needs to be passed into law.
I remain hopeful this will pass for the economic benefits it will deliver.
Bill Smith, ELB Consulting, Inc.