Is bonus depreciation still phasing out in 2025 for real estate investors?

No. The earlier TCJA phase-down (40% in 2025, 0% after 2026) was overridden by the One Big Beautiful Bill Act, which restored 100% bonus depreciation permanently for qualifying property acquired and placed in service after January 19, 2025. Real property itself isn't eligible, but a cost segregation study can reclassify components like appliances, flooring, and land improvements into shorter-life assets that qualify, accelerating large first-year deductions.

How do the 45-day and 180-day deadlines work in a 1031 exchange?

Both clocks start the day your relinquished property sale closes and run concurrently, not back-to-back. You have 45 calendar days to identify replacement property in writing through a qualified intermediary, and 180 days total to close. Take all 45 days to identify and only 135 remain to close. The deadlines are strict and aren't extended for weekends or holidays. Note: your tax return due date can cut the 180 days short, so file an extension if needed.

Are Opportunity Zone investments still worth it for deferring capital gains?

They can be, but the benefit is deferral plus potential tax-free appreciation, not avoidance of the original gain. You reinvest a capital gain into a Qualified Opportunity Fund within 180 days, and holding the QOF investment long enough can eliminate tax on its own appreciation. Timing now depends on which regime you are in. Under the original rules, section 1400Z-2(b)(1)(B) recognizes every still-deferred gain on December 31, 2026, so anyone who deferred a gain into a fund has that income landing on their 2026 return. Investments made after December 31, 2026 move to the replacement regime, which defers for five years from the date of the investment instead of to one fixed date.

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Financial Strategy

Real Estate Strategy for Owner-Operators: Tax, Forecasting and Portfolio Moves

Real estate strategy for owner-operators, Parikh Financial blog banner

Owner-operators carry the tax position of every building they hold. This guide covers depreciation after the 2025 law change, the two 1031 deadlines that run at once, and the Opportunity Zone date that lands at the end of 2026.

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An owner-operator carries the tax position of every building they hold, and three of those positions moved in the last year. Bonus depreciation stopped phasing out, the Section 179 cap changed again, and the Opportunity Zone deferral that thousands of investors set up under the original rules comes due on a single date.

What follows is the depreciation, exchange and deferral mechanics as they stand for 2026, and where each deadline actually binds.

What to Watch, and Why It Matters

Rate expectations move constantly, and the strategy below does not depend on calling them. What does matter is that your entity structure, depreciation position and cash-flow model are ready to act when financing costs move. Here’s what CEOs should monitor:

Borrowing costs: when they fall, financing gets easier and so does the competition for the same assets. Know which deals pencil at which rate before that happens, not after.
Construction and operating cost inflation: the input that decides whether a renovation budget set last year still holds this year.
NOI by sector: net operating income moves at different speeds across property types, and the spread between them is what reprices a portfolio.

How to Stay Ahead: Key Real Estate Strategies for CEOs

Three things are worth getting right before rates move, because each takes months to put in place:

1. Diversify Your Real Estate Portfolio

Spread matters along three axes, and holding several buildings that respond to the same thing is not spread:

By Property Type

Residential: Single-family homes, multifamily units, and apartments provide steady rental income.
Commercial: Office buildings and retail spaces offer high returns but are sensitive to economic shifts.
Industrial & Retail: Warehouses and retail properties benefit from e-commerce expansion.

By Location

National vs. Local Markets: Spreading investments across multiple regions reduces risk.
Urban vs. Suburban: Urban properties offer steady income, while emerging suburban markets provide affordability and growth potential.

By Investment Strategy

Buy-and-Hold: Generates long-term rental income and asset appreciation.
Fix-and-Flip: Short-term gains through renovations and sales.
REITs & Crowdfunding: Exposure to real estate without direct ownership, offering liquidity and risk distribution.

Our work with multifamily owners covers what that diversification looks like inside a single asset class.

2. Tax Strategies Worth Setting Up Now

Tax laws are shifting, and CEOs must stay ahead of changes that impact their real estate holdings. Three of them carry dates this year, and each one is easier to act on with a live financial forecast behind it:

Maximizing Section 179 and Bonus Depreciation

Bonus depreciation is no longer phasing out. The One Big Beautiful Bill Act repealed the TCJA step-down and restored 100% bonus permanently for property acquired after January 19, 2025; property acquired on or before that date stays on the old schedule, which is 20% for anything placed in service in 2026.

Section 179 is capped, and the cap comes down as you spend. For 2026 the limit is $2.56 million, and it falls dollar for dollar once total qualifying purchases pass $4.09 million, reaching zero at $6.65 million (Rev. Proc. 2025-32). Bunching every renovation into one year can therefore cost you the election, which is the opposite of how it is usually described.

What actually qualifies: the building itself does not. Section 179(e) lets you elect roofs, HVAC, fire protection and alarm systems, and security systems on nonresidential real property, plus qualified improvement property. Equipment used in lodging, such as appliances and furniture in an apartment or hotel, is eligible too, because section 179(d)(1) carves section 50(b)(2) out of the exclusion list.
Bonus depreciation has no cap, so in a large year it usually does the heavy lifting and Section 179 is kept for items bonus cannot reach.

1031 Exchanges for Tax-Deferred Growth

A 1031 exchange allows investors to defer capital gains taxes by swapping investment properties of equal or greater value.

You cannot touch the money: the proceeds have to go to a qualified intermediary at closing. Taking receipt of the cash, even briefly, ends the exchange and the gain becomes taxable.

Figure 1Both 1031 clocks start the day your sale closes. The 45-day identification window sits inside the 180-day closing window rather than ahead of it, so every day spent choosing a replacement comes off the time to close on it. The outer limit is the earlier of 180 days or your return due date including extensions, under 26 U.S.C. §1031(a)(3).

Opportunity Zones and the December 2026 Date

An Opportunity Zone investment defers the gain you roll into it and, held long enough, wipes out tax on the fund’s own appreciation. The deferral is not open-ended. Section 1400Z-2(b)(1)(B) brings every still-deferred gain into income on December 31, 2026, whether or not you sell.

If you deferred a gain under the original rules: that income shows up on your 2026 return. Size the tax now rather than in April.
If you are investing on or after January 1, 2027: the replacement regime defers for five years from the date of each investment, so there is no longer one shared cliff, and five years of holding brings a 10% basis step-up, or 30% for a qualified rural opportunity fund.
If your 2026 gain's 180-day window runs into 2027: Notice 2026-40 confirms you can invest it on or after January 1, 2027 and land in the new regime instead of the December 31, 2026 inclusion, which buys the rolling five years and the step-up. A gain realized late in 2026 is therefore worth holding until January rather than deploying in December.

Sizing that 2026 inclusion is work our tax solutions team does while there is still a quarter left to plan against it.

3. Use Technology for Smarter Real Estate Management

Two tools carry most of the weight once there is more than one property:

Portfolio Tracking Tools: Use software to monitor property performance across multiple locations.
A forecast that updates: rent roll, debt service and capex on one model, re-cut monthly, so a refinancing decision is made against current numbers rather than last year's.

Let Us Help You Manage Your Real Estate Portfolio

Parikh Financial works with owner-operators on the parts of this that carry dates: the depreciation election for the year, the two 1031 clocks once a sale closes, and the December 2026 Opportunity Zone inclusion.

There is more on property and owner-operator finances across our other writing. To have these dates run against your own portfolio, set up an intro call.