The True Benefits of 100% Bonus Depreciation for LP Investors with BPG Holdings
- Cassidy Burns
- Sep 4
- 3 min read
Updated: Oct 15
1. What Changed — A Permanent Return Starting 2025
Permanent Reinstatement: The “One Big Beautiful Bill Act” (OBBBA), signed in mid‑2025 (July 4, 2025), restored 100% bonus depreciation for qualified assets acquired and placed in service after January 19, 2025—and making it permanent, meaning anything you bought this year is directly affected (HUGE TAX BENEFITS!)
What qualifies: Applies to MACRS property with a recovery period of 20 years or less (e.g., personal property, equipment, furniture, technology, certain improvements) and Qualified Improvement Property (QIP) interior renovations
Cost segregation unlocked: Through a cost segregation study, components originally on a 27.5- or 39-year schedule can be reclassified into 5-, 7-, or 15-year categories, making them immediately eligible for 100% deduction, making syndication / fund real estate investing that much more appealing to high net worth individuals.
2. What It Means for LPs in BPG Holdings Offerings
Immediate front-loaded deductions: For properties placed in service after January 19, 2025, LPs receive large paper losses in Year 1, thanks to accelerated depreciation and use of cost segregation studies on all of the assets we are purchasing.
Why it matters:
Offset passive income: These losses can reduce or eliminate taxable income from the project or other passive sources.
Boost cash flow, enhance ROI: Lower taxable income means more retained cash and potentially better return on investment.
Your Schedule K‑1 from BPG Holdings might show:
Substantial depreciation losses in Year 1, and as we buy more buildings, future losses in following years.
Driven by accelerated deductions from a cost segregation study and bonus depreciation,
Resulting in lower taxable income, more carryforward losses, and more financial flexibility.
3. Important Caveats for Passive LP Investors
Passive activity loss limitations: Unless you're classified as a real estate professional, many of these losses may only offset other passive income—not W-2 wages or active business income .
Useful strategies:
If you qualify—or can qualify—as a real estate professional, you may unlock even greater benefit.
Otherwise, many LPs can still absorb losses against other passive investments or carry them forward.
4. Strategic Actions & Best Practices
Action | Why It Matters |
Contract & Service Dates | Ensure your contract and placed-in-service dates are after Jan 19, 2025 to qualify for full bonus depreciation. |
Cost Segregation Study | Work with BPG Holdings (or their providers) to identify depreciable components—critical for maximizing Year‑1 deductions. |
Tax Advisor Coordination | Align on passive activity rules, modeling K‑1s, and potential carryforward planning. |
5. Looking Ahead — 2025 and Beyond
Permanent tax opportunity: No more phase‑outs—100% bonus depreciation is here to stay for qualifying property.
Long-term planning:
Ongoing ability to accelerate depreciation offers a perennial advantage.
LPs should factor bonus depreciation into broader portfolio and income planning strategies.
Cash flow reinvestment: Immediate deductions can free capital for new deals—compounding growth over time.
Summary Takeaways
100% bonus depreciation is permanently reinstated starting Jan 20, 2025, for qualifying property.
Cost segregation + bonus depreciation = potential for massive Year‑1 paper losses, better cash flow, and tax-sheltered income for LPs.
K‑1s will reflect accelerated depreciation, potentially dampening taxable income immediately.
Passive loss rules may limit benefit, unless you're an active real estate professional.
Strategic coordination with advisors and sponsors (like BPG) is essential to unlock full value.
Closing Thought
The reinstatement of 100% bonus depreciation under the OBBBA ushers in a powerful era for savvy real estate investors—particularly LPs in syndications like those with BPG Holdings. When matched with cost segregation and smart planning, it can meaningfully boost first-year tax savings, enhance cash flow, and ultimately fuel future growth. Just be sure your timelines, structure, and tax strategies are aligned—so your K‑1s work harder for you.
Happy Investing ✌️
— Cassidy Burns
Founder, BPG Holdings
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