If you've been keeping up with real estate investing news, you already heard it: the One Big Beautiful Bill Act, signed into law on July 4, 2025, permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025.
For real estate investors, that's one of the biggest tax developments in years. The question most investors aren't asking is: are your books actually set up to capture it?
What Changed — and Why It Matters
Before the One Big Beautiful Bill, bonus depreciation had been phasing down. Investors who bought qualifying property in 2023 could only take 80% in the first year. 2024 dropped to 60%. Many investors had already stopped planning around bonus depreciation as a reliable tool.
That's over. 100% bonus depreciation is now permanent for qualifying short-lived property — which includes a wide range of components inside your rental properties that can be separated out through a cost segregation study.
For a Florida STR investor who bought a property in 2025 or 2026, this could mean tens of thousands in first-year paper losses. For a buy-and-hold investor with a portfolio of LTR properties, it could dramatically change the math on refinancing and acquisition decisions.
The Catch: It Only Works With Clean Books
Bonus depreciation isn't automatic. It requires that your bookkeeper and CPA work from clean, accurate records that correctly document:
What you paid, and when. The date of acquisition matters because the 100% rate only applies to property acquired after January 19, 2025. If your records are messy and the acquisition date is unclear, you may not qualify — or worse, you may claim it and not be able to defend it if audited.
What improvements you made, and how they're categorized. Bonus depreciation applies to qualifying property, not the entire building. Certain personal property components — flooring, appliances, fixtures, landscaping — may qualify for faster depreciation than the building itself. But only if your books correctly separate these costs from the overall acquisition or rehab budget.
Repairs vs. capital improvements. This distinction matters even more now. A repair is expensed immediately. A capital improvement is capitalized and depreciated — and whether it qualifies for bonus depreciation depends on the type of improvement. If your bookkeeper has been lumping everything into a single "Improvements" account, you're leaving money on the table and creating headaches for your CPA.
What a Cost Segregation Study Needs from Your Books
Many Florida investors are now getting cost segregation studies done on properties acquired in 2025 and 2026 to accelerate depreciation. These studies identify property components that qualify for 5-, 7-, or 15-year depreciation instead of the standard 27.5-year residential schedule.
For a cost segregation study to work correctly, your bookkeeper needs to provide:
- A detailed acquisition closing statement
- Itemized records of all renovation and improvement costs, broken down by component
- Receipts and contractor invoices organized by work type
- A clear timeline of when improvements were placed in service
If those records don't exist — or if costs are lumped into a single line item on your books — a cost seg study either can't be completed accurately or costs significantly more because the CPA has to reconstruct the records from scratch.
Section 179 Also Got an Upgrade
The One Big Beautiful Bill also doubled Section 179 limits to $2.5 million for qualifying improvements. This is a separate (and sometimes more flexible) tool than bonus depreciation, particularly useful for shorter-lived property and certain equipment. Your books need to be structured to take advantage of both — which means your chart of accounts needs to distinguish between different improvement types, not just log everything as "CapEx."
The Mileage Rate Went Up Too
A smaller item, but worth noting: the standard mileage rate for 2026 is $0.70 per mile. If you're driving to properties for inspections, maintenance checks, or vendor meetings, that's deductible at 70 cents a mile. Most investors who don't have a bookkeeper miss this entirely because it requires contemporaneous mileage records — not a reconstruction at year-end.
What to Do Now
If your books aren't structured to take advantage of permanent bonus depreciation, you have two options: wait until your CPA finds the gaps at tax time (expensive, stressful, often too late), or get your books cleaned up now.
At Lead Accountants, we work with Florida real estate investors to make sure their books are structured to support the tax strategies their CPAs want to execute — including cost segregation, bonus depreciation, and proper improvement categorization. We don't file taxes, but we give your CPA exactly what they need to maximize what you keep.
Book a free consult → We'll review your current setup and identify any gaps before they cost you.
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