Early Thursday morning, May 22, 2025, the U.S. House of Representatives (House) passed, by a vote of 215-214 (quite the squeaker!), a revised 2025 reconciliation bill, incorporating changes to the tax code from the House Ways and Means Committee, Budget Committee, etc.

The House bill will now proceed to the U.S. Senate.

Most of the changes relate to extending or making permanent, or adjusting, some of the provisions of the Tax Cust and Jobs Act of 2017 (TCJA).

Some of the new proposed changes may be highly effective for real estate investors― if this bill is enacted, there’s a lot of opportunity for you!

Rigby Financial Group is proud to specialize in providing tax and financial services and advice to professional real estate investors! Read on, then reach out! We would love to help you make the most of the opportunities afforded you by these changes!

Some highlights of the revised tax provisions of particular relevance to real estate investors include:

Section 179: Increased Expense Limits

Section 179 allows businesses to deduct, up to a specified dollar amount, the full cost of certain types of property in the year of purchase, rather than having to depreciate those costs over time.

While Section 179 usually excludes the costs of buildings and land, it does cover many related expenses―so long as the property is acquired and used as a commercial asset.

Section 179-deductible expenses relevant to real estate investors include:

• HVAC systems
• Roofs
• Fire protection
• Security systems
• Other building improvements

Section 179 applies to these expenses for both your assets held for rental or sale and the (owned) premises on which your business operates!

Other business purchases to which Section 179 applies include:

• Office equipment―e.g., computers, printers, copiers
• Smartphones and tables used exclusively for business purposes
• Office furniture
• Software
• Vehicles used exclusively in your business (for weights between 6,000 and 14,000 lbs.)

Thanks to the TCJA, these items no longer need to be purchased new to be eligible for Section 179 tax treatment, and used purchases have qualified since tax year 2017.

The new provisions would double the dollar limit on Section 179 deductible expenses from its current $1,250,000 to $2,500,000 for 2025.

They would also increase the expense phase-out threshold from $3,130,000 to $4,000,000.

The only caveat is that the purchased business asset(s) must be placed in full use during the year purchased―but that’s been true since Section 179’s inception.

Section 168: Return of the 100% Bonus Depreciation

Before the TCJA’s enactment in 2017 (though Section 168’s history dates back in one form or another to at least 1954), Section 168’s bonus depreciation for the year of purchase was limited in recent decades to 50% of the cost. This limit held through tax year 2017.

But the TCJA increased that 50% to 100% for tax years 2018 through 2022. The downside was that the bonus phased not only down, but out, by 20% annually thereafter.

From 2017 until now (fingers crossed!), Section 179 bonus depreciation was scheduled to drop, beginning in tax year 2022, and has dropped through tax year 2024, as follows:

• 2022 = 100%
• 2023 = 80%
• 2024 = 60%
• 2025 = 40%
• 2026 = 20%
• 2027 = 0%

But the House bill, as revised, restores the 100% bonus depreciation, retroactive to eligible property purchased from January 19, 2025 through the rest of the current tax year, and extends its applicability to purchases made before January 1, 2030. Certain aircraft and long-production-period property would be eligible for 100% bonus depreciation through December 31, 2030.

We do expect that following tax years 2029/2030, phase-out will take place as it has under the 2017 law. So be prepared to take advantage while you can.

Section 199A: Increased Qualified Business Income Deduction

Under the TCJA’s Section 199A, owners of domestic pass-through businesses (e.g., sole proprietorships, S Corporations, partnerships) were empowered to deduct up to 20% of their qualifying business income (QBI) on their individual income tax returns.

QBI includes business income (including such income reported on K-1s), business losses, and deductions for qualifying businesses.

The new bill’s changes push that 20% QBI deduction to 23%.

Certain income limitations are involved in determining eligibility for the full QBI deduction, although partial eligibility may still be available.

Section 199A was one of the TCJA’s provisions which, absent legislative action, would sunset at midnight, December 31, 2025. The new proposed bill would make this Section permanent.

There is, of course, a lot more in the full reconciliation bill, and we will get into some of those provisions in a later post (stay tuned!), but we wanted this post to highlight those provisions of the greatest benefit to real estate investors in particular, though they also apply, obviously, to numerous other businesses and business owners.

We should point out that the Senate has indicated it will want its own fingers in the pie, and we can’t know what a final bill will look like at this point.

You can trust us, though, to keep you abreast of significant developments.

We invite you to consult our experts on tax and financial services to real estate investors. Let us help you save every tax dollar the law allows, and proposes!

Because we understand that your business and your plans for it are, as they should be, all about you. And being all about you is what we are all about!

Please click here to email us directly – Rigby Financial Group’s trusted, expert team is at your service – that’s what we are here for! And serving you is also our passion.

Until next time –

 Peace,

 Eric