Bonus Depreciation in 2026: Rental Property Checklist
Review current bonus depreciation rules, property dates, study classifications, and owner-level limitations before relying on a rental-property deduction.
The current rule is not a universal 20% rate
The IRS announced guidance on restored 100% additional first-year depreciation for eligible property acquired after January 19, 2025. Older phase-down language should not be applied automatically to every 2026 purchase. Eligibility still depends on the property and applicable acquisition and placed-in-service rules; the year printed on a study does not establish the rate.
Separate the property from the tax outcome
A cost segregation report identifies and supports components. The return preparer determines how those conclusions interact with the owner’s tax position. Ask for two separate deliverables: a reconciled property schedule and a tax projection showing assumptions, limitations, state adjustments, and the timing of any usable benefit. A large deduction and an equally large reduction in current tax are different results.
Build a date-and-cost file
Collect the purchase agreement, relevant amendments, closing statement, construction contracts, invoices, and evidence of readiness for use. Identify later furniture purchases and improvements rather than assigning every item the house closing date. Flag related-party transactions, changes from personal use, incomplete projects, and previous depreciation for the preparer; do not fill missing dates with a convenient default.
Compare the incremental result
Ask the preparer to compare the proposed study treatment with the depreciation available without the study. Include the fee, filing work, expected holding period, and possible sale consequences. Multiplying a gross deduction by a marginal rate can be a useful illustration only when all assumptions are stated; it is not a property-specific savings promise.
Questions before the return is filed
Confirm which components are eligible, which elections were considered, whether prior returns contain relevant choices, and how state treatment differs. Keep the final asset schedule and election records with the report. For properties acquired earlier, use the historical-date guide rather than assuming a new report changes their original tax history.
Primary references
Educational information. The return preparer should verify current guidance and apply it to the taxpayer’s facts.