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Painting Business Owners: Learn which real estate assets qualify for bonus depreciation.

Name: Painting Business Owners: Learn which real estate assets qualify for bonus depreciation.
Uploaded: 2024-07-03T13:00:34+00:00
Duration: 44 s
Channel: Daniel Honan
Description: In this segment, the presenter explains that bonus depreciation can be applied to removable, non‑structural items within a purchased building—such as…

3 Jul 2024 · 1 min

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In this segment, the presenter explains that bonus depreciation can be applied to removable, non‑structural items within a purchased building—such as furniture and fixtures—rather than to components that are integral to the real estate. To illustrate the distinction, a tax professional recounts a childhood analogy involving a Barbie Dream Home: if you invert the dollhouse and shake it, anything that falls out (e.g., furniture, accessories) would likely qualify for bonus depreciation, while items that remain attached to the structure are considered part of the building and are not eligible. The speaker advises painting business owners who are acquiring real estate to identify such “shake‑test” items to potentially increase deductible expenses, while noting the analogy should be taken lightly.

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we might be able to use bonus depreciation on the things inside the building, things that are not components of the building. So furniture, fixtures, things like that. I heard a tax professional, she gave a neat illustration. She said that when she was a young girl, she had one of those Barbie Dream Homes, you know, with the plastic set and with all the little things inside. She said if I took the roof off my Barbie Dream Home, I turned it upside down and I shook it, whatever falls out I can probably bonus depreciate. Whatever stays in is going to be a component of the real estate. So take that with a grain of salt, but I thought that was pretty smart. So yeah, if you're buying real estate and you want to try to increase some of your expenses, look for things that would, you know, fall out under a shake test, generally speaking.