100% bonus depreciation is permanent.
What that means for your Airbnb.
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, permanently reinstated 100% bonus depreciation for qualifying property acquired after January 19, 2025. Combined with a cost segregation study, this is the single biggest first-year tax deduction available to STR investors.
“Bonus depreciation” and “cost segregation” are two different things — but investors use them interchangeably.
It’s confusing because they’re almost always used together. Here’s the actual distinction — and why it matters for your taxes.
The IRS tax code provision — Section 168(k) — that allows immediate expensing of eligible assets
The engineering study that identifies which assets qualify for bonus depreciation
The general concept: taking deductions faster than the standard 27.5-year schedule
A different first-year expensing provision — similar result but with caps and limitations
The short version: Cost segregation is the study. Bonus depreciation is the tax rule that makes the study so valuable. You need both. Abode gives you both.
Bonus depreciation history — and why right now matters.
Tax Cuts & Jobs Act — 100% bonus on eligible property
Phase-down begins
Continued phase-down
Final days of the phase-down
OBBBA signed July 4, 2025 — permanently restored
Three steps to your first-year deduction.
Get a cost segregation study
The study identifies which components of your property qualify for 5-year, 7-year, or 15-year depreciation instead of 27.5 years. Appliances, furnishings, outdoor amenities, and specialty systems are typical candidates.
Apply 100% bonus depreciation
Under the OBBBA (signed July 4, 2025), all 5-year and 7-year property placed in service after January 19, 2025 qualifies for 100% immediate expensing. The full asset value is deducted in year one — not spread over years.
Use the STR loophole to activate the deductions
Bonus depreciation creates paper losses. For most rental investors, those losses are passive — useless against W-2 income. The STR loophole changes that: if your property qualifies, those losses become non-passive and offset any ordinary income.
Every year without a cost seg study is a missed deduction.
Missed years can be recovered with a look-back study + Form 3115 — but only for years where the statute of limitations is still open. Don’t let more time pass.
Properties acquired before January 19, 2025 are subject to different bonus depreciation rates. Your CPA should confirm the applicable rate. Abode’s study includes the correct calculation for your acquisition date.