Expanded deductions for real estate investors.

Real estate investors could see savings in three areas: bonus depreciation, deductions for rental and nonresidential property costs, and deductions for pass-through income. Specifically:

First-year bonus depreciation has been increased from 50% to 100%. Additionally, owners can now apply bonus depreciation to both new and used “qualified property” (defined by the IRS). The bonus depreciation allowance will be reduced by 20% each year from 2023 through 2026.

Rental property owners can deduct the costs of personal property (subject to limitations) they use in their rental real estate. They also can deduct improvement costs for nonresidential properties.

Owners who hold assets in pass-through entities such as limited liability companies (LLCs) or limited partnerships (LPs) might be able to benefit from the new 20% deduction on qualified business income. More good news: Real estate used for business purposes, such as rental property, is not subject to the new $10,000 limit on deductions for state and local income taxes (SALT), including property taxes. Taxpayers can also continue to deduct their mortgage interest on these properties without limitations.

Increased Alternative Minimum Tax (AMT) exemption amounts. Increased exemption amounts and phase-outs should mean fewer taxpayers will be subject to this tax. The new exemption amounts for 2018 are:

$70,300 for unmarried individuals not filing as a surviving spouse.

$109,400 for joint filers and surviving spouses.