7 Tax Moves Real Estate Investors Should Make Before December 31
Sam's List Editorial | 2026-06-23
7 Tax Moves Real Estate Investors Should Make Before December 31 Most of the money in real estate tax planning isn't made in April. It's made in the last six weeks of the year — and it evaporates at midnight on December 31. That's the thing nobody tells you about real estate investor year-end tax moves: almost none of them work retroactively. You can't decide in March that you wanted a cost segregation study done last year. You can't backdate an hours log. The calendar is the enforcement mechanism, and the IRS doesn't grant extensions on physics. Here are the seven real estate investor year-end tax moves worth making before the year flips — and the deadline that quietly kills each one. 1. The cost segregation study: a real estate investor year-end tax move that frees six figures A cost segregation study breaks your building into its component parts. Instead of depreciating the whole thing over 27.5 or 39 years, an engineering study carves out the five-, seven-, and 15-year property — carpet, cabinetry, parking lots, specialized wiring — and lets you front-load that depreciation now. On a $2 million commercial building, a study commonly reclassifies 20% to 35% of the basis into short-life property. That's $400,000 to $700,000 of accelerated deductions, much of which can hit in year one once bonus depreciation is layered on. The catch is in the words "placed in service." The asset has to be in service before December 31, and a real engineer has to finish the study before you can claim the deduction. Engineering firms book out. Start in December and you're starting next year's plan. 2. Lock in 100% bonus depreciation while the percentage is back at full Here's the part that changed, and the part the brief told us to verify before printing a number: bonus depreciation under IRC Section 168(k) is back at 100% . The One Big Beautiful Bill Act permanently restored 100% bonus depreciation for qualifying property — generally MACRS property with a class life of 20 years or less, plus qualified improvement property — acquired and placed in service after January 19, 2025. The IRS confirmed the mechanics in Notice 2026-11. The old 80%/60%/40% phase-down is gone. This is what makes the cost seg in move trusted so powerful right now. That $500,000 of reclassified short-life property? Under 100% bonus, much of it deducts in the year placed in service instead of bleeding out over 15 years. The timing move: if a purchase is going to land near year-end anyway, getting it placed in service before December 31 pulls the full deduction into this tax year. If your income is low...
