THESE PROVISIONS OFFER POWERFUL TOOLS TO OFFSET INCOME IN A SINGLE YEAR, ACCELERATING TAX SAVINGS.
BONUS DEPRECIATION & SECTION 179: ACCELERATING TAX DEDUCTIONS
• Section 179 Expensing Allows immediate deduction of the cost of qualified property (equipment, software, and certain real estate improvements) in the year placed in service. It’s optional and replaces standard capital depreciation if taken. Recent IRS limits for 2025 set the cap at $1.25 million , phasing out after expendable costs exceed roughly $3.13 million (The Tax Adviser, IRS). • Bonus Depreciation Enables accelerated cost recovery by deducting a percentage of qualifying property in its first year. Under the new law, 100% bonus depreciation returns permanently for assets acquired and placed into service after January 19, 2025, reviving the full immediate deduction phased out Depreciation accelerators remain a cornerstone of strategic tax planning for property owners and business investors.
under earlier law (Plante Moran). i • How They Work Together
Section 179 is flexible and applied asset by asset, while bonus depreciation applies more broadly. Investors typically start with Section 179 (to meet or reduce taxable income), then apply bonus depreciation to remaining property costs (nationalfunding.com).
For real estate investors using 1031 exchanges, particularly via DSTs, these provisions offer powerful tools to offset income in a single year, accelerating tax savings.
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