MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

Maximize Your REAL ESTATE Tax Benefits with Bonus Depreciation

27 Aug 2025 · 1 min

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1:01

Mark Kohler shows how cost segregation lets you depreciate building components over 5, 7, or 15 years instead of 39, and how a specific IRS election treats all those losses as ordinary deductions without needing to be a real estate professional. Set up a separate LLC for the building with matching ownership percentages to unlock thousands in write-offs that can eliminate tax bills.

Chapters

When you go to buy this building that you're going to rent back to yourself, you can accelerate the depreciation on the 5, 7 and 15 year property of that building with which is called a cost segregation analysis. The dash for election which says under the IRS code, if I own the business and own the building in the same percentages in proportional ownership that are mirror each other, I truly am buying my own building. I make a special election and now I can treat all the losses on that depreciation as an ordinary loss. I don't have to be a real estate professional. I don't have to materially participate. All of those other rules don't even apply. So by setting up an LLC to own the building, which you would do, do not put this in your current operational entity. You open up a sister company in an LLC with the same ownership percentages of the operational business by the building and you just unlocked thousands and thousands of dollars of tax write off that you can accelerate and maybe even wipe out your entire tax bill this year or for the next couple of years and use those refunds to invest back into your business.