How Smart Money Uses Bonus Depreciation to Build Wealth Faster

The Depreciation Playbook Is Changing. Are You Ready?

Hey ,

Last week I flew on a private jet. Not mine—but it didn’t need to be. I got there 30 minutes before takeoff (which meant I was 32 minutes earlier than their average client) and walked straight out to the tarmac. I had only seen this on HBO.

Services like this let you capture the upside of ownership without the overhead. And yes, they still come with tax perks. (Bonus depreciation on jets? Yep. Still a thing.)

Bonus depreciation lets businesses and investors deduct a huge portion—historically up to 100%—of eligible asset purchases in year one. It’s one of the most powerful tools to grow wealth while minimizing taxes.

And it’s not just for luxury toys. It’s for anyone investing in the backbone of the economy: manufacturing, real estate, equipment-heavy businesses. Over the last 12 months, our firm deployed nearly $20 million of LP capital into just those two sectors—both of which benefit from this exact tax treatment.

I can tell you from experience that making large capital expenditures while also paying taxes in the same year can leave your businesses undercapitalized. Bonus depreciation in practice may sound like a “bonus,” but it really just means you can afford to grow.

As an investor, it’s an insider play that is a literal game changer (if you like backing appreciating, cash-flowing assets).

It was supercharged by the 2017 Tax Cuts and Jobs Act, but now it’s phasing out, making 2025 the last year to materially participate.

Over the weekend, lawmakers made real progress on the so-called “Big Beautiful Bill”—a proposed tax package that includes restoring 100% bonus depreciation. But whether it passes or not, this year is critical for understanding how to use what’s left of it.

In this week’s issue, we break down:

• What the phaseout means for investors and entrepreneurs

• Which tools are still in play (Section 179, anyone?)

• And why smart tax strategy should boost returns—not justify weak deals

—Walker Deibel
WSJ & USA Today Bestselling Author of Buy Then Build
Founder, Build Wealth

DATA DIVE

The Depreciation Clock is Ticking

If you're a private investor and you're not tracking the changing landscape of bonus depreciation, you're about to miss one of the most powerful levers for cutting your tax bill and accelerating growth.

Thanks to the 2017 Tax Cuts and Jobs Act, businesses could deduct 100% of qualifying asset purchases in the year they were made. That’s been a goldmine for anyone buying equipment, high ticket software, or real estate. But that full write-off is quickly vanishing into thin air. This year it maxes out at 40% and is set to hit 0% by 2027, unless Congress changes course.

Translation? We’re running out of runway to keep more of our capital upfront, rather than handing it to the IRS.

This isn’t just a technical tweak—it’s a structural shift that will impact valuation models, deal underwriting, and investment returns in sectors like real estate, manufacturing, and oil & gas. Smart investors are already pivoting to front-load capital investments before the tax shield shrinks further.

In this week’s featured guide, we break down:

• What advanced depreciation actually means
  

• Who benefits most (hint: you, if you act now)
  

• The 2025 phasedown timeline
  
  

• Why Congress might extend it—and what to do if they don’t
  

This is the kind of tax alpha the ultra-wealthy exploit without breaking a sweat. But you don’t need a family office or a Big Four accountant to use it.

Read the Full Guide: Advanced Depreciation 2025 (More)

BEHIND THE NUMBERS

Bonus Depreciation: Easy Come, Easy Go— Here’s What to Do Now

Most people think of bonus depreciation as a tactical perk. But to understand why it’s vanishing, you need to see it as what it really was: an emergency stimulus baked into the tax code.

Back in 2017, the Trump administration’s Tax Cuts and Jobs Act introduced 100% bonus depreciation to turbocharge capital investment. But it actually didn’t start there: Bonus depreciation has been in effect for 21 of the past 24 years. 

The idea? Let entrepreneurs and investors write off the entire cost of qualified property in year one, instead of spreading deductions over years. It wasn’t about fairness—it was about speed. If the economy needed a jolt, this was it.

Any time the economy weakens, bonus depreciation returns to boost domestic investment:

Bonus depreciation reliably re-emerges during economic downturns to spur domestic investment. After the 2008 financial crisis and again during the COVID-19 shock in 2020, policymakers used 100% bonus depreciation to drive capital spending and stabilize growth.

And it looks like the hotly contested Big Beautiful Tax Bill of 2025 either spells the beginning of the end  – or a new beginning for Bonus Depreciation. 

So what does this mean for you?

No matter which way the wind in Washington blows, make 2025 your year to capitalize on bonus depreciation. Best case scenario it’s back at 100% making asset-heavy investments a huge win. But if the phasedown stays intact, 2025 is the last year for bonus depreciation to have a meaningful impact (next year it will phase down to just 20%).

Here’s how the smart money is already pivoting.

The New Play:

• CapEx-heavy deal? Accelerate purchases into 2025 to lock in higher depreciation rates.

• Low-income years ahead? Use Section 179 instead—it lets you write off $1.25M in 2025 if your total purchases stay under $3.13M. Bonus depreciation can create a loss; Section 179 only offsets income.

• High-income year? Stack both tools. Use what’s left of bonus depreciation, then sweep the rest with Section 179.

Big Picture: Bonus depreciation is a limited-time window, not a forever benefit. Remember, the tax code is written to encourage the investments that benefit from advanced depreciation (don't be afraid of taking advantage of the law!) Smart tax strategy in investment can turn a good deal into a great return.

THE PLAYBOOK

Stop Chasing Write-Offs. Start Buying Real Assets.

The photo above isn’t about showing off.

It’s about access—and the quiet revolution happening in how the wealthy live, move, and build leverage.

I don’t own that jet. I didn’t maintain it, crew it, or depreciate it. I just used it.

Because here's the play: you don't have to own the entire asset to benefit from it. Whether it’s flying private, investing in real estate, or acquiring a company—you can access upside without the operational weight. More on that next week.

But let’s talk about a trap I see smart people falling into right now:

Depreciation Theater

Everyone loves a good tax break. But buying depreciation is like flying private just for the Instagram post. Technically impressive. Strategically flawed.

Yes, bonus depreciation and Section 179 are powerful. Yes, they can supercharge your returns. But they can also mask bad investments.

If your underwriting thesis is “the write-off makes the numbers work”… the numbers don’t work.

Flipping the Framework

Instead of asking:

How much can I write off?

Ask:

Would I still want this business if the tax code changed tomorrow?

That’s your real due diligence test.

The Smarter Play

• Use Depreciation to Optimize, Not Justify
  Write-offs should amplify great businesses—not compensate for weak ones.

• Model with and without the perks
  Assume bonus depreciation goes to 0% (it will). Still a good deal? Then it’s a real one.

• Think Like the Wealthy: Own Slices, Not Weight
  Just like private aviation, you don’t need to own 100% of a business to gain leverage. Fractional ownership, investor syndicates, and passive structures let you scale strategically. (Stay tuned for next week’s breakdown.)

• Stay Grounded in Income
  Tax perks are seasonal. Cash flow is perennial.

Final Word

Tax deductions don’t make a deal. Strong fundamentals do. The people you admire don’t chase depreciation—they build wealth and use the code to defend it.

So before you say “yes” to that next deal because the accountant says it’s a win...

Ask if you’d fly it without the write-off.

CASE STUDY

How One Real Estate Firm Used Advanced Depreciation to Unlock $2.3M in Tax Savings

Let me tell you a story that’s going to make your CPA look like they’ve been playing checkers while others are out here playing 3D chess.

A Michigan-based real estate firm wrapped construction on a $28 million apartment complex. And instead of filing it away under “normal deal,” they got down and dirty with a strategy other firms would put on autopilot. I’m talking about the surgical, high-octane move: cost segregation

Here’s the game: break down the building into its component parts, appliances, flooring, lighting, even parking lots and sidewalks, and reclassify them into asset classes with shorter depreciation timelines (5, 7, 15 years instead of 27.5 or 39). That makes them eligible for 100% bonus depreciation, which allows you to write off the entire cost of those assets in the year they're placed in service.

Result?

If they’d gone the traditional route, they would’ve taken just $42,000 in depreciation year one.

Instead, they walked away with $6.9 million in deductions, instantly reducing their tax bill by $2.3 million at a 34% rate.

That’s not a typo. That’s nearly one-tenth of the project’s total cost unlocked in year one, just by knowing how to pull the right levers.

But they didn’t stop there. They layered on a $250,000 energy-efficiency credit (Section 45L, for the tax nerds in the room) to pad the margins even further.

All in, they reclassified 24% of the total project cost: 16% tied to personal property, 8% to land improvements.

Here’s the bottom line:

This isn’t just about real estate. It’s about looking at every investment through a cash-flow-first lens. Use the tax code like a toolkit. Play offense with depreciation. And don’t settle for average when the IRS has literally written the playbook for you to win bigger.

HIDDEN GEM

The Short-Term Rental Tax Loophole

Short-term rentals aren’t just about high nightly rates, they’re a hidden tax shield for high earners.

If you materially participate, STRs can count as non-passive, meaning you can use bonus depreciation to offset active income. So, if you buy a $600K short-term rental and do a cost segregation study, you could deduct over $150K in the first year, even against your W2 income.

That’s not just cash flow, it’s tax alpha.

And the market isn’t slowing down. Global STR revenue is projected to hit $228 billion by 2030. That’s a structural tailwind, demand is rising, and so are the write-offs if you move now.

TL;DR: STRs + accelerated depreciation = high-income tax hack Wall Street can’t match.

WEALTH STACK TOOLBOX

Section 179 Calculator: Know Before You Buy

If bonus depreciation was the big, flashy deduction any investor can take, Section 179 is the reliable workhorse built for entrepreneurs. It's still alive and well—and if you’re investing in equipment, software, or other qualified assets, this tool can help you maximize your write-offs and optimize your tax timing.

We’ve added a Section 179 Deduction Calculator so you can run the numbers yourself. Plug in your expected equipment purchases and see exactly how much you can write off this year. It’s straightforward, fast, and absolutely essential if you’re buying a business with capex needs.

Download the Calculator

Use it before you sign the deal. Use it before year-end. Just don’t ignore it—because this deduction could mean the difference between a good investment and a great one.

WEALTH STACK SPOTLIGHT

Don Peebles: From Appraiser to Billion-Dollar Developer

Most of us are taught that wealth follows the rules. Don Peebles built his by rewriting them.

Before he was the real estate mogul behind $4 billion in developments, Don was a 23-year-old kid running a small appraisal firm in D.C. No Ivy League pedigree. No venture backing. Just sharp instincts, a chip on his shoulder, and an unapologetic ambition to own.

And he didn’t wait for permission.

In the ‘90s, while the mainstream real estate crowd was chasing office towers and beachfront hotels, Don broke through as a Black developer by betting on underserved markets—and winning. One of his breakout plays? The Royal Palm Hotel in Miami Beach, a historic property he redeveloped and later sold for $127.5 million. That was in 2004.

Since then, Peebles has gone on to build luxury towers in New York, LA, and D.C., launch a $500 million fund for minority developers, and throw legal punches at city governments when politics get in the way of progress. (He recently sued the City of L.A. over a $1.6B skyscraper project getting iced.)

The lesson here? Ownership is power—but only if you play offense.

Peebles didn’t just enter real estate—he dominated it. He saw what most people missed: that wealth is created when you stop being the client and start being the landlord. That capital isn't scarce, but control is. And that the rules of the game are easier to bend when you're the one building the field.

His books (The Peebles Principles and The Peebles Path) are half biography, half blueprint. They don’t glamorize real estate. They expose it. And they show exactly how someone from outside the club can build an empire without changing their DNA.

If you're stuck thinking you need more credentials before you make your move—Don Peebles is proof you need a strategy and the guts to use it.

Want to invest like Don?
Start by learning how to underwrite off-market assets the way insiders do.
→ Check out Acquisition Lab or watch Buy Then Build for tactical breakdowns.
→ Check out our live investment opportunities at Build Wealth where you can invest alongside me (we may just have 700 cash flowing oil wells targeting tax free returns via depreciation for investors.)

Stay stacked, ;P
-Walker

WHAT WE ARE READING

"Depreciation is the IRS’s gift to real estate investors."

Brandon Turner, Open Door Capital