Want to Save on Your 2025 Taxes? Here's How

I was talking with a property owner this week about his beach condo and whether it made sense to sell.

He said, “I’d love to sell, but I don’t want to pay the capital gains taxes.”

Fair enough, I thought. I’m feeling the same with my income taxes — but I’ve been using bonus depreciation to cut mine down.

“Are you doing that?” I asked.

“No, how does that work?” he replied.

Here’s the short version: It’s part of the “Big Beautiful Bill” that allows 100% depreciation of certain parts of an investment property.

Let’s break it down with an example:

• Say you sell your current property for $800K and buy a new one for $1.2M. That’s $400K of new capital, right?
  
  

• A cost segregation study might identify roughly 25% ($100K) of qualifying assets.
  
  

• That could give you a deduction of about $37,000 in year one if you’re in the 37% tax bracket.
  
  

Even better? You can still defer the capital gains from your sale.

The owner’s eyes lit up. “So I could sell this place, upgrade to a better one, not pay the capital gains tax, and get a nice tax break on my income?”

“Exactly,” I said. “That’s what I’m doing myself. I’m selling one of my smaller condos, upgrading to a larger one with stronger rental income, and knocking down my income tax at the same time.”

“You can do that, huh?”

“Yep. Just make sure you talk to your accountant about bonus depreciation, cost segregation, and stacking it with a 1031 exchange.”

He smiled. “I’m going to do that.”

I told him, “I think it’s a smart move.”

There’s Still Time to Save on 2025 Taxes

If you want to lower your 2025 tax bill using bonus depreciation, your new property must be placed into service by December 31.

What does “placed in service” mean?

It means your property is purchased, furnished, and available for rent before year-end.

Do that, and you may be able to deduct the entire cost of qualifying components — furniture, fixtures, appliances, and land improvements — in year one.

Example:

• Buy a $900,000 beach rental
  
  

• Roughly 25% qualifies for accelerated depreciation
  
  

• At 100% bonus depreciation and a 37% tax bracket → $83,000+ in potential tax savings the first year
  
  

The catch? Your property must be fully ready and rented before year-end, and your paperwork must be in order. That means acting now, not in December.

Good News — There’s Always Next Year

If you can’t get everything together this year, don’t worry. You don’t lose the deductions forever. In fact, you might want to time your cost segregation and bonus depreciation for a year when your tax bill is highest.

Bottom line:

“You don’t lose the depreciation by waiting — you control when it hits. It’s like an ace in your back pocket you play when it saves the most.”

Pro tip: Waiting only makes sense if you know you’ll have a significantly higher tax hit in a future year. Otherwise, it’s usually smarter to take the deduction now, reinvest, and let compounding do the work.

Talk Tax Moves With Your Tax Professional

I’m sharing what I’ve learned through my experience as an investor — but I’m not a tax professional. Every situation is different, so talk to your CPA or tax advisor about timing.

The key? Plan ahead. The earlier your real estate strategy aligns with your tax strategy, the more money you keep in your pocket.

Market Snapshot: Destin Real Estate

Condos: October 2024 vs October 2025 (YTD)

• Listings Sold: +2.4%
  
  

• Median Sales Price: +8.8%
  
  

• New Listings: -26.9%
  
  

• Median List Price: +0.9%
  
  

What it means: Buyers are back. Prices are up after five months of decline, and inventory has dropped in 6 of the last 7 months. Today’s strong deals may not last long.

Homes: October 2024 vs October 2025 (YTD)

• Listings Sold: +36.1%
  
  

• Median Sales Price: +24.2%
  
  

• New Listings: +16.2%
  
  

• Median List Price: -5.7%
  
  

What it means: Destin home sales are up five months in a row. Prices are rising, but supply is up — meaning buyers still have choices. Don’t wait too long, though — today’s options could become tomorrow’s missed opportunities.

If you want to see which condos or homes still pencil out for investors, I’ve got tools to help:

• Free Property Value Analysis
  
  

• Free Investor Criteria Worksheet
  
  

• Free Top Value Homes in Destin