Bonus Depreciation is Back!

Invest by 12/31/25 to take advantage!

Bonus depreciation is once again one of the most powerful tools available to real estate investors—allowing up to 100% of qualified property costs to be deducted in the first year of ownership. Recent legislative updates have revived this valuable incentive, creating a limited-time opportunity for investors to accelerate deductions, increase cash flow, and maximize returns. By strategically identifying bonus-eligible assets such as equipment, site improvements, and specialized building components, investors can realize substantial tax savings before the window closes.

We are here to combine deep expertise in commercial real estate with sophisticated tax strategy to help you capture every advantage. Our team guides you through identifying, structuring, and executing investments designed to optimize bonus depreciation benefits—while aligning with your broader financial goals. Invest by 12/31/25 to take full advantage of this powerful incentive and position your portfolio for long-term success.

Property Types That May Qualify for Accelerated Depreciation///

Gas Stations with C-Stores///

Potential: Up to 100%

Primary Bonus-Eligible Components:

  • Entire building structure (if more than 50% of floor space or sales are fuel-related)
  • Tanks and dispensers
  • Canopies
  • Paving

Maximizing Factors:

  • Meets the “retail motor fuel outlet” test under IRC §168(e)(3)(E)(iii)
  • Buildings under 1,400 sq. ft. automatically qualify
  • No detailed cost segregation required if criteria are met

Golf Courses///

Potential: 50-60%

Primary Bonus-Eligible Components:

  • Greens, tees, bunkers, irrigation, drainage
  • Cart paths, bridges, lighting, signage

Maximizing Factors:

  • Rev. Rul. 2001-60 and IRS field directive support treatment
  • Site prep tied to land improvements is depreciable
  • Clubhouse treated separately (typically 39-year property)

Cold Storage Facilities///

Potential: 25-45%

Primary Bonus-Eligible Components:

  • Insulated panels, cooling systems, and equipment platforms
  • Dock leveling equipment, racking, and drainage

Maximizing Factors:

  • Dedicate systems to temperature control and logistics
  • Less emphasis on structure, more on function

Car Washes///

Potential: Up to 100%

Primary Bonus-Eligible Components:

  • Wash systems, vacuums, kiosks, plumbing, and electrical.
  • Drive lanes, site lighting, and drainage.

Maximizing Factors:

  • Structure is minimal; most cost is equipment and sitework Plumbing/electrical serve specific equipment (1245 property)
  • Bonus eligibility confirmed in IRS guidance and field audits

Theme Parks & Amusement Properties///

Potential: 50-70%

Primary Bonus-Eligible Components:

  • Rides, control systems, lighting, A/V, special sets
  • Landscaping, signage, paths, utilities

Maximizing Factors:

  • Structures are non-building or stage equipment
  • Show elements and theatrical builds treated as 5- or 7-year
  • IRS precedent via casino and entertainment property rulings

Agricultural & Food Production Facilities///

Potential: 50-70%

Primary Bonus-Eligible Components:

  • Livestock Structures (Hog, Poultry, Turkey Barns)
  • Food Processing Facilities
  • Urban Farming & Controlled-Environment Agriculture (CEA)

Maximizing Factors:

  • Structure is single-purpose and not suitable for general use
  • Permanently installed systems solely to support livestock or plant production
  • Modular, removable, or specialized facilities support shorter class life treatment
  • Site improvements (drainage, fencing, irrigation)

Self Storage Facilities///

Potential: 50-90%

Primary Bonus-Eligible Components:

  • Roll-up doors, partitions, and climate control systems
  • Asphalt, fencing, drainage, and site utilities

Maximizing Factors:

  • Modular or pre-fab construction increases 5-year assets
  • Extensive site improvements
  • Security, lighting, and mechanicals dedicated to unit operations

Clean Manufacturing & Labs///

Potential: 30-50%

Primary Bonus-Eligible Components:

  • Cleanroom walls/ceilings, process-specific HVAC
  • Custom plumbing, gas lines, electrical

Maximizing Factors:

  • Modular cleanrooms and dedicated systems segregated
  • Whiteco factors and court cases support reclassification
  • Particularly strong for biotech, semiconductor, pharma

Casinos///

Potential: 30-50%

Primary Bonus-Eligible Components:

  • Themed architecture, slot wiring, surveillance systems
  • Specialized lighting, décor, movable partitions

Maximizing Factors:

  • IRS has issued detailed cost segregation guidance
  • 5- and 7-year classification for décor and tech infrastructure
  • Casinos often exceed 40% short-life assets in well-supported studies

Data Centers///

Potential: 30-50%

Primary Bonus-Eligible Components:

  • Raised floors, PDUs, UPS, backup generators
  • Cooling towers, fire suppression, security infrastructure

Maximizing Factors:

  • Segregate dedicated systems from the general building
  • Tier III/IV data centers see higher allocation
  • IRS supports equipment- and utility-driven depreciation

Cannabis Grow Facilities///

Potential: 50-70% (non-building)

Primary Bonus-Eligible Components:

  • Grow lighting, HVAC, irrigation, and control systems
  • Fencing, paving, and temporary structures

Maximizing Factors:

  • Greenhouses or temporary structures (often non-building)
  • Industrial buildouts mimic food/agriculture processing
  • State-only benefit due to the 280E limitation federally

Make the market work for you///

The clock is ticking on one of the most powerful investment incentives in real estate. Whether you’re breaking ground, expanding operations, or upgrading your portfolio, every day between now and 12/31/25 counts. From buying and selling properties to structuring investments that maximize tax advantages, our team is here to help you capture every deduction, boost your returns, and turn smart strategy into serious growth.

Let’s build your next success story.

-Written by Todd Phillips & NAI Legacy