How to Apply Section 179 to Commercial Real Estate and STRs

As bonus depreciation phases out, Section 179 is becoming more relevant for those looking to immediately expense certain capital expenditures.
You’ll learn:
- How to strategically use Section 179 to offset W-2 income
- The limitations when held in partnerships
- The recapture implications investors need to be aware of.
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[@thebagnechannel3183]

I’m impressed with your knowledge. Few tax professionals know these rules.

[@aussmith4751]

Ah,
Well this is significant for married individuals owning STRs that provide significant services with property owned through tenancy in common. It is crucial to elect qualified joint venture so they don't have to file at the entity level. Especially if they intend to use section 179 in excess of the income generated by the property to offet other odrinary income. Is my understanding correct? Awesome information. Thank you!

[@clmb511]

It is a very good point that this is risky for smaller businesses with assets like vehicles, computers etc that may fall below 51% business use or go dormant at some point. Bonus depreciation is only recaptured on asset sale/ disposition where as 179 is recaptured when business use falls below 51%.

[@OutdoorsAmplified]

Adopt a capitalization policy of $5k and up