Key Takeaways:

• Starting in 2023, bonus depreciation will be phased-out over the next 4 years, and completely phased out by 2027.
• In 2023, bonus depreciation will drop to 80%. From there it will decrease by 20% each year until it is completely phased out.
• Even without bonus depreciation, you still have accelerated depreciation. The benefits of accelerated depreciation aren’t as far off from 100% bonus depreciation as you might think.
• For us, the phase-out doesn’t change our opinions about real estate investing. It continues to be a tremendous investment vehicle. It continues to be one of the best ways for high-income doctors and professionals to legally shelter their taxes.
• We anticipate the major impact of the phase-out will be that investors will hold onto their properties longer. The buy and hold strategy is actually where we started our journey. 100% bonus depreciation incentivized us to sell properties that we would have normally held onto for a longer period of time. With the phase-out, it’ll be back to business as usual!