Real estate investors can greatly benefit from strategic timing and optimized deductions in 2026. Here are some ways how:

1. Revisit Cost Segregation Studies

Accelerated depreciation continues to offer substantial tax savings. If you acquire or renovate a property in 2026, consider a cost segregation study to break assets into shorter recovery periods and boost early‑year deductions.

2. Plan Ahead for Potential Depreciation Phaseouts

If bonus depreciation continues to phase down, planning large capital improvements early in the year can help capture more favorable rates.

3. Utilize 1031 Exchanges Thoughtfully

A like‑kind exchange remains a powerful tool to defer capital gains. Map out potential transactions early, especially if planning to consolidate or expand your portfolio.

4. Track Passive Activity Rules

Real estate professionals should ensure activity logs are accurate and complete to support material participation and unlock additional loss deductions.