In this solo instructional video, Joe Homs explains the Trump administration’s proposal to reinstate 100% bonus depreciation retroactively from January 20 2025 through 2029 and to raise the Section 179 expense limit to $2.5 million. He defines bonus depreciation as a tax provision that lets investors deduct the full cost of qualifying improvements (renovations, appliances, HVAC, roofs, driveways, etc.) in the year the assets are placed in service, rather than spreading the deduction over 5‑27.5 years. Homs illustrates how this can eliminate taxable rental income—for example, an $80 K improvement on a fixer‑upper could be fully written off, offsetting other income. He discusses how cost segregation reports can accelerate depreciation of short‑life components and how the higher Section 179 limit makes the benefit accessible to smaller investors without formal cost‑segregation studies. The video outlines strategic implications for buy‑and‑hold, BRRRR, flipping, and development investors, emphasizing the temporary nature of the provision (expires after 2029) and urging viewers to consult CPAs and tax strategists to structure deals for maximum tax efficiency. Homs briefly acknowledges critics who cite a projected $400 B deficit over ten years, but frames the provision as a rare, powerful tool for real‑estate investors. The video ends with a call to action for likes, subscriptions, and comments about how viewers plan to use the rule.
Chapters
Hey everyone, welcome back to the channel. Today we're diving into a major update that could be a game changer for real estate investors. Trump's push to bring back 100% bonus depreciation. If you're in the real estate game, flipping, holding, developing, this is something you need to understand. Let's break it down. First, what is 100% bonus depreciation? In simple terms, it allows investors to deduct the entire cost of qualifying improvements or property in the year those assets are placed into service. We're talking about things like renovations, appliances, HVAC, Roofs, driveways, stuff you normally depreciate slowly over 5, 7, or even 27.5 years. Under this bill, you'd write it all off year 1. And that's not the small advantage. This can wipe out your taxable income and put real money back in your pocket. We're talking tens of thousands of dollars depending on your project size. This was originally part of the 2017 Tax Cuts and Jobs Act, but it's been phased out 80%, 60%, and I'll keep dropping it down. Now, Trump wants to bring 100% bonus depreciation back retroactively to January 20th, 2025, and extend it all the way through 2029. Here's why that matters for real estate. Let's say you buy a fixer-upper rental property and spend $80,000 on improvements. Instead of depreciating that over 27.5 years, you write it off immediately. This could eliminate all your next rental income and maybe offset other income as well. Same goes for mobile homes, apartments, even short-term rentals. As long as it's an investment property and you've made qualifying improvements, this could apply. This is especially powerful if you're using cost segregation. Engineered reports can break down a property into faster depreciating components. And now all those short-lived assets, carpets, cabinets, landscaping, could be written off in full right away. For flippers, this might not seem as direct since flips are typically short-term capital assets. But if you hold property as a rental first, Or you're doing a BRRRR strategy, this can really stack the benefits. Even for developers, you put in roads, sewer lines, infrastructure. Many of those costs qualify. Now, don't forget Section 179. Trump's bill also raises that limit to $2.5 million, making it easier for small and medium-sized investors to expense property improvements without needing a formal Cost segregation. This makes tax planning more accessible. You don't need a 100-unit building to benefit, but there's the catch. The window is temporary. This bonus depreciation is set to expire after 2029. So smart investors are thinking, how can I take advantage of this while it lasts? How do I structure my deals now to get the most tax efficiency later? Talk to your CPA. Talk to your tax strategist. This could change how you look at your next acquisition or value-add project. Now, of course, critics argue this adds to the federal deficit—nearly $400 billion over 10 years, according to estimates. But for us in real estate, this is a rare window of opportunity. It's not every day the tax code gives investors a tool this powerful, especially one that puts immediate dollars back in your business. So here's the takeaway. If you're in real estate, especially buy and hold, value-add, or development, this is the moment to act strategically. Structure your deals right, plan your renovations with bonus depreciation in mind, and optimize your timeline to capture the most benefit before the phase-out. All right, that's it for today. If this helped you think differently about your tax strategy, do me a favor, give it a like, subscribe, and hit that bell so that you don't miss the next one. And drop a comment. How are you planning to use 100% depreciation in your next deal? See you on the next video.
