Hannah Hammond breaks down 100% bonus depreciation, which lets real estate investors deduct the full cost of a property in the year they buy it. This can turn a six-figure tax bill into a down payment on the next deal. Non-real-estate professionals can use it against passive income too.
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100% bonus depreciation is like why every real estate professional loves real estate. It allows you to basically have a big reduction in your taxes that is due. You could buy a property and you can depreciate 100% the year that you put it into service or the year that you buy it. Let's say you have a $300,000 tax bill. You can use that as a down payment to go buy an asset and then get a $300,000 plus or minus— this is simple math— but a $300,000 tax deduction on your taxes, therefore wiping out around $150,000 in taxes. And then you're buying a new asset. That asset it appreciates, you add value to it, and you get to compound your wealth and profits much more quickly. And if you're not a real estate professional, you still get that depreciation against any passive income that you may have.