Tax return changes for real estate investors

Bonus depreciation is back at 100% for qualifying property acquired after January 19, 2025, which makes cost segregation studies worth revisiting. Investors with active real estate businesses should test the excess business loss limit of $256,000, or $512,000 joint, for 2026.

Opportunity Zones are permanent, with new zones from January 1, 2027, and rural zones need only a 50% substantial improvement. Investors in high-tax states also benefit from the higher SALT cap, subject to the phase-down at higher incomes.

• Which properties were bought or improved after January 19, 2025?
• Is any property financed at a level where the 163(j) limit applies?
• Are you considering an Opportunity Zone fund for a recent capital gain?

Keep each property in its own set of income and expense accounts, or its own books, with improvements capitalized separately from repairs. That makes the property-level depreciation and the Schedule E figures straightforward to produce.