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STR year-end tax decisions

STR Year-End Depreciation Timing: Bonus-Dep and §179 Decisions Before Dec 31

Place each asset in service by Dec 31 to claim 2026 depreciation, choose bonus depreciation over §179 when you need a W-2 offset, and confirm three gates still hold. Decisions in order, with the Dec 31 clock as the hinge.

Operational companion to the OBBBA bonus-depreciation guide and the STR year-end tax checklist: seven decisions and the Q4 traps that quietly kill the deduction.

The 60-second answer

Bottom line: date the install, not the invoice; confirm all three §469 and §280A record gates before you place anything in service.

  • Dec 31 is a placed-in-service deadline, not a purchase deadline. An asset paid for in December but installed in January is a 2027 deduction, not a 2026 one (Treas. Reg. §1.167(a)-10(b), the "ready and available" rule).
  • OBBBA (the One Big Beautiful Bill Act, P.L. 119-21) restored 100% bonus depreciation permanently for property acquired and placed in service after Jan 19, 2025 (IRC §168(k); IRS Notice 2026-11 provides interim guidance).
  • §179 for 2026 caps at $2,560,000, with phase-out starting at $4,090,000 and a $32,000 heavy-SUV sub-limit (Rev. Proc. 2025-32, the IRS's 2026 inflation-adjustment notice). §179 is capped by aggregate business taxable income (which Treas. Reg. §1.179-2(c)(6)(iv) treats as including W-2 wages); bonus-dep is not.
  • §461(l) 2026 ceiling is $256,000 single, $512,000 MFJ (the cap on business losses that offset non-business income). A single oversized bonus-dep hit can push a high-salary host over the line and defer the excess to a future NOL.
  • Three same-day gates have to hold: the §469 7-day average-stay exception, a material-participation test, and the §280A personal-use limit. Any one failing turns bonus-dep from a W-2 offset into a suspended passive loss.

Not tax advice; general framework. Figures from Rev. Proc. 2025-32 and OBBBA (P.L. 119-21) are current as of the publish date; confirm with your CPA before filing.

What "placed in service" means for an STR host

Depreciation does not start on the day you pay the invoice. It starts on the day the asset is "placed in service," which Treas. Reg. §1.167(a)-10(b) defines as the point when the asset is "in a condition or state of readiness and availability for a specifically assigned function." For an STR asset, that usually means the item has been installed, the system is operational, and the property could rent to a guest tonight.

Three practical consequences follow for Q4 planning. A sofa delivered Dec 28 and installed Jan 3 is a 2027 asset. A new water heater bought Dec 29 and installed Dec 30 is a 2026 asset. A mini-split system ordered Dec 15, delivered Jan 10, and energized Jan 15 is a 2027 asset, even if a 50% deposit cleared your bank in December. The installation and availability date controls, not the purchase, delivery, or payment date.

Everything below runs off this definition. Each year-end decision below asks whether an asset can realistically be placed in service by Dec 31, and whether that is actually the right call given your 2026 and 2027 tax picture.

Decision 1

When should an STR host buy before Dec 31 vs defer to January?

General information, not tax advice; confirm with your CPA.

Place the asset in service by Dec 31 only when your 2026 marginal rate, non-passive status, and §461(l) headroom together beat 2027's. The default assumption, that pulling every deduction into the current year is best, breaks down under three common STR fact patterns. ("§469 non-passive stack" below means the two §469 tests that together let an STR loss offset W-2 wages: the §1.469-1T(e)(3)(ii)(A) 7-day average-stay exception plus one of the §1.469-5T material-participation tests.)

Accelerate into 2026

  • Your 2026 marginal rate is higher than you expect 2027 to be (bonus, equity vest, consulting spike).
  • You cleared the §469 non-passive stack this year but may not next year (schedule change, planned sabbatical).
  • The property's first full depreciable year is 2026 and a cost-seg study is already lined up.

Defer to 2027

  • Your 2027 marginal rate will be higher (promotion, option exercise, business starting to profit).
  • You are already projected over the §461(l) ceiling without the Q4 purchase; the excess rolls forward anyway.
  • The asset cannot be installed before Dec 31 without rushing; forced installation often triggers warranty or quality problems that cost more than the one-year deferral is worth.

If you are on the accrual method for the rental activity, note that §461(h) economic performance rules also constrain the deduction timing for some payable items. For most individual STR hosts on the cash method, placed-in-service date is the controlling test. Confirm your method with your CPA before relying on either.

Decision 2

Can §179 or bonus depreciation apply to STR furniture, appliances, and improvements?

General information, not tax advice; confirm with your CPA.

Classification note. §179(f) real-property improvements (roofs, HVAC, fire-protection, alarms, security systems) and qualified improvement property under §168(e)(6) both require nonresidential classification. STR classification as residential (27.5-year) vs nonresidential depends on average-period-of-customer-use facts and is a CPA call. Treat the §179 real-property column in the matrix below as conditional on nonresidential classification.

Both elections let you expense qualifying property for an Airbnb or other short-term rental in year one. They are not identical. §168(k) bonus-dep has no business-taxable-income cap and can create or deepen a loss; §179 is capped by aggregate business taxable income under §179(b)(3), so it cannot drive aggregate below zero. Treas. Reg. §1.179-2(c)(6)(iv) counts W-2 wages as part of that aggregate, so §179 is not inert for a W-2 earner. For an STR host using the §469 non-passive stack, bonus-dep is almost always the broader lever; §179 is the surgical tool for a specific asset or state-conformity edge case.

Election matrix for common STR asset classes: class life, bonus-depreciation eligibility, §179 eligibility, and the common year-one approach (confirm with your CPA).
Asset Class life Bonus-dep eligible §179 eligible Common approach (confirm with CPA)
Furniture, bedding, decor 5-year Yes Yes Bonus-dep (simpler, no income cap)
Appliances (fridge, washer) 5-year Yes Yes Bonus-dep
Carpeting, moveable partitions 5-year Yes Yes Bonus-dep
Land improvements (fence, deck, driveway) 15-year Yes Limited Bonus-dep
HVAC (replacement unit) Residential STR: 27.5-year (building system). Nonresidential STR: 15-year QIP if interior non-structural. Only if the unit is treated as QIP on a nonresidential STR Yes under §179(f), nonresidential STR only Depends on residential vs nonresidential call (see classification note above)
Roof, structural components 27.5-year No (structural) Yes under §179(f), nonresidential STR only §179(f) only if the STR is classified nonresidential; see note above
Qualified improvement property (QIP) 15-year Yes Yes Bonus-dep
Heavy SUV (gross vehicle weight > 6,000 lbs) 5-year Yes Capped ($32,000 for 2026) Mix: §179 up to cap, bonus-dep on remainder

QIP matters for STR owners doing non-structural interior work on an existing building: lighting, finishes, non-load-bearing walls, interior drywall. Under IRC §168(e)(6), QIP is 15-year property and bonus-dep eligible. Building enlargements, elevators and escalators, and internal structural framework are specifically excluded.

Decision 3

What are the 2026 §179 ceilings for STR hosts?

General information, not tax advice; confirm with your CPA.

OBBBA raised the §179 cap substantially starting in 2025, and Rev. Proc. 2025-32 then applied the 2026 inflation adjustment on top of the OBBBA base. The current numbers:

  • • §179 maximum expensing (2026): $2,560,000
  • • Phase-out threshold: starts at $4,090,000 of qualifying property placed in service, zero at $6,650,000
  • • Heavy-SUV sub-limit: $32,000 (up from $31,300 in 2025); this is a §179(b)(5) sub-limit
  • • Aggregate business-income cap: §179(b)(3) still applies; the deduction cannot drive aggregate taxable income from the active conduct of trade or business below zero. Treas. Reg. §1.179-2(c)(6)(iv) counts W-2 wages as part of that aggregate, so §179 is not inert for a W-2 earner.

Two subtleties catch STR hosts. First, §179(f) explicitly includes qualified real-property improvements (roofs, HVAC, fire protection, alarm and security systems) for nonresidential real property; it is not available for residential rental (27.5-year) property. That expanded reach is one reason §179 beats bonus-dep on structural components that bonus-dep excludes, but only when the STR is classified nonresidential (see the Decision 2 classification note). Second, the SUV sub-limit is often misread: the $32,000 is a §179(b)(5) sub-limit, not a §280F cap. Heavy SUVs (gross vehicle weight > 6,000 lbs) are excluded from §280F passenger-auto depreciation caps under §280F(d)(5)(B), so a heavy SUV used over 50% for business can take §179 up to $32,000 and then run bonus-dep on the remaining basis. §280F(d)(4) listed-property substantiation rules still apply.

Decision 4

Does a cost-segregation study pay for itself on a small Airbnb or STR?

General information, not tax advice; confirm with your CPA.

A cost-segregation study reclassifies a chunk of an Airbnb or STR property's basis from 27.5-year to 5- or 15-year property, so the reclassified pool becomes bonus-dep eligible. On a typical STR purchase in the $300,000 to $800,000 basis range, industry rules of thumb put the reclassification at 20% to 35% of basis into the shorter-life buckets (ranges vary; a vendor estimate on your specific property is the only reliable number).

Study makes sense when

  • Building basis is above about $500,000.
  • The property's first depreciable year is 2026, with 100% bonus-dep on the reclassified pool.
  • You expect to meet the §469 non-passive stack both years that bonus-dep flows through.
  • A full-service study will cost $4,000 to $15,000 and reclassify >20% of basis.

Short-form or DIY is enough when

  • Building basis is below about $300,000.
  • The reclassifiable pool is mostly furniture and appliances, not structural.
  • You already have detailed renovation records that break out the component invoices.
  • State conformity will claw back the federal benefit (consider the state picture before paying for a study).

If you place a property in service late in 2026 and a full study takes 6 to 10 weeks, the study report may not land before you file. Rev. Proc. 2024-23 and prior guidance generally allow a Form 3115 change-of-accounting-method filing in a later year to pick up a missed cost-seg benefit; it is less time-pressured than the asset placed-in-service deadline itself.

Decision 5

How does §461(l) limit a 2026 bonus-depreciation election?

General information, not tax advice; confirm with your CPA.

§461(l) limits how much net business loss a non-corporate taxpayer can deduct against non-business income (W-2 wages, interest, dividends, capital gains) in a single year. For 2026, Rev. Proc. 2025-32 sets the threshold at $256,000 single and $512,000 married filing jointly. The excess carries forward as a net operating loss under §172.

The 2026 figures are lower than 2025's $313,000 single / $626,000 MFJ, which is unusual year-over-year. OBBBA made §461(l) permanent and reset the base when it did, so Rev. Proc. 2025-32's inflation-adjusted 2026 numbers started from a lower base than 2025's; the base-year mechanics are worth confirming with your CPA. A high-salary host who runs a large bonus-dep hit through Schedule E can push past the §461(l) ceiling in a single year. The over-the-ceiling portion is not lost, but it defers to a future NOL and loses this year's W-2 offset.

The practical rule: project your 2026 business-loss total (STR Schedule E loss plus any other active business losses, net of business income) and compare it to the §461(l) ceiling before you finalize bonus-dep elections. If you are already near the ceiling, consider electing out of bonus-dep on one property class under §168(k)(7) (the election is per class, not an amount), and deferring the next asset's placed-in-service date into January 2027. That can deliver more total offset than packing an oversized bonus-dep hit into a single year.

Decision 6

Does personal use over 14 days cancel the depreciation deduction?

General information, not tax advice; confirm with your CPA.

§280A(d)(1) treats a dwelling as a residence (not a pure rental) for the taxable year if the taxpayer uses it for personal purposes for more than the greater of 14 days or 10% of the days it is rented at fair rental. If you tip over that line, Schedule E rental deductions are capped at rental income under the §280A(c)(5) ordering rules (which require operating expenses to absorb income first, then depreciation last), and a big bonus-dep election does not produce the loss hosts expect.

Five kinds of use count toward the personal-use count, often invisibly:

  • • Direct personal use by the taxpayer or family (§280A(d)(2)(A); family defined by §267(c)(4), which includes siblings, spouse, ancestors, and lineal descendants)
  • • Reciprocal-use arrangements with other dwelling-unit owners (§280A(d)(2)(B))
  • • Use by any individual at less than fair rental, including an at-cost family stay (§280A(d)(2)(C))
  • • A rental to a family member unless the family member uses it as their principal residence and pays fair rental (§280A(d)(3))
  • • Co-owner personal use is attributed to each co-owner (§280A(d)(2))

Days you spend on repairs and maintenance generally do not count as personal use under §280A(d)(2), but the activity has to be substantially full-time repair/maintenance; a weekend of light cleaning paired with family-time days reads as personal use. Document the repair-day activity contemporaneously; a reconstructed note after the IRS asks is not the same as a timestamped record from the day. Field Ledger's personal-use day log keeps the running count against the greater-of-14-days-or-10% ceiling, with repair-day activity tagged separately so the count stays clean. For the full personal-use mechanics, see section 3 of the STR year-end tax checklist or the free personal-use-days template.

Decision 7

Does the §469 non-passive stack still hold at year-end?

General information, not tax advice; confirm with your CPA.

All the depreciation elections in the world do not reach W-2 wages unless the STR activity itself is non-passive under §469. For 2026, that means two tests have to pass at the same time:

  • • The §1.469-1T(e)(3)(ii)(A) 7-day average-stay exception. The property's average period of customer use for the year must be 7 days or less. Average stay is total rental days divided by number of guest reservations, not a per-booking test.
  • • A §1.469-5T material-participation test. The common STR routes are the 100-hour test with no one participating more, the 500-hour test, or (rarely for STR hosts) substantially-all participation.

If either test fails, the entire Schedule E loss, including bonus-dep, is passive and suspends under §469 instead of offsetting W-2. For the hour-math deep-dive, see the 100 vs 500 hour test guide; for the W-2 interplay, see the STR tax loophole with a full-time job.

The year-end implication: if your average-stay or hour math is marginal, finalize the fact pattern before Dec 31. You cannot retroactively log November hours in April. Any contemporaneous-records case law under §1.469-5T(f)(4) tolerates "reasonable means" of proof, but not records fabricated after the IRS asks.

The year-end asset-buying trap list

Seven patterns kill the deduction, each tied to one of the decisions above. Review before you place anything in service in Q4.

Trap 1. Paid in December, installed in January.

Depreciation starts at placed-in-service, not at payment. Treat December invoices with January installations as 2027 assets. (§1.167(a)-10(b).)

Trap 2. Bonus-dep on used property from a related party.

§168(k)(2)(E)(ii) requires the acquisition not to be from a related party. A furniture package bought from a spouse's LLC is not bonus-dep eligible, even if everything else is.

Trap 3. §179 pushing your aggregate business income below zero.

§179(b)(3) caps the deduction at aggregate taxable income from the active conduct of trade or business; the excess carries forward and is not available this year. For a bonus-dep-eligible asset, electing bonus-dep instead has no such cap and can push through the loss. For a §179-only asset (e.g., certain §179(f) real-property improvements on a nonresidential STR), work the ceiling with your CPA before placing in service.

Trap 4. 15th personal-use day booked for the holidays.

A late-December family stay that pushes personal use past the §280A(d)(1) threshold reclassifies the property for the whole year, retroactively. Audit the count by Dec 20, not Jan 2. Field Ledger's personal-use entries land in the same ledger as rental days, so the ratio is one query, not an April audit.

Trap 5. Oversized bonus-dep hitting §461(l).

A single large placed-in-service purchase for a high-salary host can push past the 2026 $256k / $512k ceiling. The excess rolls forward as an NOL and loses this year's offset.

Trap 6. 2026 average-stay creeping toward 8 days.

A few long bookings in Q4 can push the full-year average-stay past 7 days, depending on how many bookings you have so far. One check in late October, one in late November, one before Dec 15. Field Ledger's stay log shows your running average against the 7-day line in real time, so a late-season long booking does not surprise you in April.

Trap 7. Hour log reconstructed in April.

§1.469-5T(f)(4) allows "reasonable means" of proof, which case law reads as including appointment books, calendars, and narrative summaries made contemporaneously. A spreadsheet first typed the week before filing fails that test. Field Ledger's MP hour entries carry the date you logged them, so the record is contemporaneous by construction.

How Field Ledger helps

See your average stay, personal-use days, and MP hours drift before a December booking or holiday stay costs you the year. Everything lands in one entry log that exports as a Schedule E CSV your CPA can work from. On the depreciation-timing decisions above, four things it does matter:

  • • Per-property capital-expense capture. Log each capital purchase with the Expense form or an Expense: Vendor;description;amount;category;method line, e.g. Expense: HVAC Pro Inc.;mini-split install 2BR cottage;4850.00;capital-improvement;ACH. Optional AI-assisted capture, where enabled on your plan, can draft the line for you to review before anything saves. Capital purchases are logged by expense date; note the install date in the entry so your CPA can confirm the placed-in-service date on Form 4562.
  • • §469 MP hour tracking that measures progress against the 100-hour and 500-hour test thresholds. Each entry carries the date you log it, so the record is contemporaneous by construction.
  • • §469 average-stay tracking alongside the hour math, so you can watch the Q4 average-stay running total against the 7-day line (fact-specific; confirm with your CPA).
  • • §280A personal-use day log that shows your personal-use days against the greater-of-14-days-or-10% ceiling (fact-specific; confirm with your CPA).

What Field Ledger does not do: compute your bonus-dep election, run cost segregation, or file your return. Those live with your CPA. Field Ledger is the record layer underneath; the planning calls above belong to you and your tax preparer. The product keeps the taxpayer-safe anchor: it reports your position against the §469 and §280A thresholds; it never asserts a tax-favorable fact you did not state.

Decisions now, documents in January

The seven decisions above happen in November and December; the documentation that supports them is what your CPA sees in January. If your 2026 records are thin, no bonus-dep election will fix that in April. Start the record axes that back the §469 non-passive stack today.

Existing users: open your MP summary, stay status, and personal-use status this week, before the Dec 20 personal-use audit (Trap 4).

  • Contemporaneous §469 material-participation hour log
  • §469 average-stay running total across the whole year
  • §280A personal-use day count against the greater-of-14-or-10% test
  • Per-property capital-expense capture, logged by expense date with the install date noted in the entry

Field Ledger's 714-day free trial is no-credit-card: enter one week of records, see where your three gates land, decide from there.

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Frequently asked questions

Does an asset I pay for in December but install in January count for 2026?

No. Depreciation starts when the asset is placed in service, not when it is paid for or delivered. Treas. Reg. §1.167(a)-10(b) defines placed in service as the point when the asset is ready and available for its specifically assigned function. A sofa delivered on Dec 28 and installed in the rental on Jan 3 is a 2027 asset, not a 2026 one. The invoice date is not the controlling fact; the installation and availability date is. General information, not tax advice; confirm with your CPA.

Can bonus depreciation offset my W-2 salary?

Only if the STR activity itself is non-passive under §469. Two conditions have to hold at the same time: the average period of customer use must be 7 days or less (the §1.469-1T(e)(3)(ii)(A) short-term rental exception), and you must meet one of the §1.469-5T material-participation tests. If both hold, the STR is outside the §469 default rental category and losses, including the bonus-dep hit, flow against W-2 wages on Form 1040. If either fails, the loss is passive and suspended. Even when both gates hold, the deduction remains subject to other limits such as at-risk (§465), basis, and §461(l). General information, not tax advice; confirm with your CPA.

What are the 2026 §179 expensing limits?

Per Rev. Proc. 2025-32, the 2026 §179 expensing cap is $2,560,000. The deduction phases out dollar for dollar once qualifying property placed in service exceeds $4,090,000, reaching zero at $6,650,000. The heavy-SUV sub-limit is $32,000, up from $31,300 in 2025. These figures are set by annual inflation adjustment; confirm current amounts with your CPA before filing.

Why would I use §179 instead of 100% bonus depreciation?

In most STR fact patterns, bonus-dep is simpler and reaches further than §179. §179 is capped by aggregate business taxable income under §179(b)(3), so it cannot drive aggregate below zero; bonus-dep has no such cap and can create or deepen a loss. Treas. Reg. §1.179-2(c)(6)(iv) counts W-2 wages as part of that aggregate, so §179 is not inert for a W-2 earner. §179 shines when you want to pick and choose per-asset, when state conformity disfavors bonus-dep but allows §179, or when you want to elect §179 on one asset class while electing out of bonus-dep on another. General information, not tax advice; confirm with your CPA.

Does a cost-segregation study make sense for a small STR?

It depends on the price point and the type of improvement. A standalone study typically runs $4,000 to $15,000 and pays back fastest when the building basis is above about $500,000, when a renovation generates a sizable component reclassification, or when a short-term rental is in its first depreciable year with 100% bonus-dep available. Below those thresholds, a short-form or DIY component schedule can be a reasonable fit. These are planning rules of thumb, not tax advice.

What is the 2026 §461(l) excess business loss limit?

For 2026 the threshold is $256,000 single and $512,000 married filing jointly, per Rev. Proc. 2025-32. Non-corporate taxpayers cannot deduct net business losses above those amounts; the excess carries forward as a net operating loss under §172. The 2026 figures are lower than 2025's $313,000 single and $626,000 MFJ because OBBBA reset the §461(l) base when it made the limit permanent, and inflation-indexed from the lower base; confirm the base-year mechanics with your CPA. A large Q4 bonus-dep election can push a high-salary STR host into §461(l) territory in a single year. General information, not tax advice; confirm with your CPA.

If my STR has any personal use, does bonus depreciation still apply?

Only if personal use stays within the §280A(d)(1) safe harbor. If you use the property for personal purposes for more than the greater of 14 days or 10% of fair-rental days, the property is treated as a residence under §280A, and the rental deductions are limited to rental income. A bonus-dep election on a dwelling classified as a residence under §280A does not create the Schedule E loss hosts expect, so run the personal-use count before the end of December.

Can I take 100% bonus depreciation on used property?

Yes, provided it meets the §168(k)(2)(E)(ii) acquisition requirements: not previously used by the taxpayer, not acquired from a related party, and not acquired as part of a non-recognition exchange. OBBBA restored 100% bonus-dep permanently for property acquired after Jan 19, 2025, and placed in service after that date; see IRS Notice 2026-11 (Jan 14, 2026) for interim guidance. Reliance on Notice 2026-11 is all-or-nothing: taxpayers must follow the guidance in its entirety. Confirm acquisition history with your CPA before relying on it.

Can I use §179 for Airbnb furniture and appliances?

Yes, in most cases. Furniture, bedding, decor, and appliances purchased for an Airbnb or other short-term rental are 5-year tangible personal property and qualify for §179 expensing under §179(d). The §179(b)(3) business-income cap still applies, so §179 cannot drive your aggregate business income below zero; Treas. Reg. §1.179-2(c)(6)(iv) counts W-2 wages as part of that aggregate. For most STR hosts, 100% bonus depreciation under §168(k) covers the same assets more simply and without the income cap. General information, not tax advice; confirm with your CPA.

Does §461(l) limit my bonus depreciation deduction?

Not directly, but it caps the net business loss you can deduct against non-business income in one year. For 2026, that cap is $256,000 single or $512,000 MFJ per Rev. Proc. 2025-32. A large bonus-dep election that creates a Schedule E loss big enough to drive your aggregate business loss past the §461(l) threshold will see the excess rolled forward as an NOL under §172, not disallowed. If your goal is a 2026 W-2 offset, project the aggregate business-loss total before you finalize the bonus-dep election. General information, not tax advice; confirm with your CPA.

Related guides

Statutory sources

  • IRC §168(k): Bonus depreciation (100% permanent for property acquired and placed in service after Jan 19, 2025, per OBBBA): Cornell LII
  • IRC §168(e)(6): Qualified improvement property, 15-year class life: Cornell LII
  • IRC §172: Net operating loss deduction and carryforward: Cornell LII
  • IRC §179: Expensing of certain depreciable business assets (including §179(b)(3) business-income cap, §179(b)(5) heavy-SUV sub-limit, §179(d) definitions, and §179(f) qualified real-property improvements for nonresidential real property): Cornell LII
  • IRC §280A: Disallowance of certain expenses for business use of a home or dwelling unit: Cornell LII
  • IRC §280F: Listed-property substantiation and passenger-automobile depreciation caps (heavy SUVs excluded by §280F(d)(5)(B)): Cornell LII
  • IRC §461: Taxable year of deduction (including §461(h) economic performance and §461(l) excess business loss limitation for non-corporate taxpayers): Cornell LII
  • IRC §469: Passive activity losses and credits limited: Cornell LII
  • Treas. Reg. §1.167(a)-10(b): Placed-in-service definition: Cornell LII
  • Treas. Reg. §1.179-2(c)(6)(iv): Aggregate taxable income for §179(b)(3) business-income cap includes W-2 wages: Cornell LII
  • Treas. Reg. §1.469-1T(e)(3)(ii)(A): 7-day short-term rental exception: Cornell LII
  • Treas. Reg. §1.469-5T: Material participation tests: Cornell LII
  • Rev. Proc. 2024-23 (and successor annual procedures): Automatic consent for accounting-method changes (including Form 3115 cost-seg catch-up): IRS.gov
  • Rev. Proc. 2025-32: 2026 inflation adjustments (§179 cap, §461(l) threshold): IRS.gov
  • IRS Notice 2026-11: Interim guidance on OBBBA §168(k); all-or-nothing reliance: IRS.gov
  • Form 3115: Application for change in accounting method: IRS.gov
  • Form 4562: Depreciation and amortization (including §179 and §168(k) elections): IRS.gov
  • P.L. 119-21 (OBBBA, the One Big Beautiful Bill Act, July 4, 2025): Permanent 100% bonus-dep restoration, §179 base increase, §461(l) base reset: Congress.gov

The key takeaway

Year-end depreciation is a timing problem wrapped around a records problem. The elections, caps, and ceilings are set by the statute; the only lever a host actually controls is the placed-in-service date and the quality of the §469 record stack behind it. Decide which assets get installed by Dec 31, pick the election that fits the asset, confirm your three gates (7-day average-stay, material participation, §280A personal use) still hold, and let your CPA finalize the Form 4562 numbers in April.