You’re right that residential rental buildings themselves have a 27.5-year life and don’t qualify for bonus depreciation. But IRS guidance and case law (see HCA v. Commissioner and the IRS Cost Segregation ATG) confirm that when a property is acquired, a cost segregation study can reclassify significant portions of the building into 5-, 7-, or 15-year property. Those components clearly meet the “20 years or less” requirement in §168(k)(2)(A) and are bonus-eligible. That’s why real estate investors regularly use bonus depreciation — not on the entire structure, but on the reclassified personal property and land improvements.
Can someone else who can answer my question let me know whether 6 months of qualified property is enough to claim bonus depreciation?
