-- BLUFFTON, United States — August 11, 2026 — The return of 100% bonus depreciation has widened the gap between real estate investors who plan proactively and those who file reactively - and the difference shows up directly in after-tax returns.
According to Steven Libman, founder of Investing With Purpose™, most investors approach taxes the wrong way: they walk into an accountant's office in April, find out what they owe, and treat the outcome as inevitable. Libman argues that the tax code was never designed to be a trap. It was designed to be read. Investors who read it as an incentive manual - and structure their acquisitions accordingly - keep significantly more capital in play, year after year, compounding across decades.
The CPA and the Tax Strategist Are Not the Same Person
The confusion starts with titles. A CPA is genuinely knowledgeable about taxes, so investors assume that knowledge extends to strategy. It rarely does - at least not by default.
A CPA's core function is compliance: take the financial information provided, apply the correct deductions, file accurately and on time. What a CPA does not typically do is call in January to model projected tax liability for the year ahead, identify upcoming capital decisions that could be structured to reduce it, and flag the window closing on December 31st.
That is a tax strategist's job. And most real estate investors have never hired one.
"It took me almost 15 years of business to understand this," says Libman. "Your CPA and your tax strategist should be different people."
The moment an investor's financial picture includes real estate holdings, partnership income, K-1 losses, and capital gains across multiple assets, the planning seat needs to be filled separately from the compliance seat. The two roles are not interchangeable and they do not cover each other by default.
What Bonus Depreciation Actually Makes Possible
The reinstatement of 100% bonus depreciation under the Big Beautiful Bill has made the planning conversation more urgent and more valuable than it has been in years. The mechanics are straightforward but widely misunderstood.
A cost segregation study - an engineering report that breaks a property into its individual components — identifies which elements qualify for depreciation schedules of 15 years or shorter. Under 100% bonus depreciation, anything qualifying on that shorter schedule can be accelerated entirely into year one. The result is a paper loss - sometimes a substantial one - generated in the same year the property is acquired, while the property itself continues to produce positive cash flow and distributions.
That paper loss flows to investors through the K-1 partnership tax document and can be applied against passive income, long-term capital gains, and in some cases - for investors who qualify as real estate professionals under IRS rules - against W-2 income as well.
"When we are trained to hear loss, we think, 'Oh no, I lost money,'" Libman says. "And in real estate, a K-1 loss usually means the opposite of what's happening in real life. It just means that it's a non-cash expense."
The Carry-Forward Mechanic Most Investors Leave on the Table
One of the least understood features of real estate depreciation is what happens to losses that cannot be immediately applied. Most investors assume unused losses expire. They do not.
If an investor generates more in K-1 losses than they have passive income to offset in a given year, the excess carries forward indefinitely - available to shelter income in future years, including gains realized on the eventual sale of an asset. This carry-forward feature transforms depreciation from a single-year tax event into a long-term capital management tool.
"Those carry forward in perpetuity, so that can continue to offset income down the road, not just this year," Libman says. "It's not like if you don't use it, you lose it. You get to keep it."
Investors who build a portfolio of multifamily assets over time accumulate a growing pool of carried-forward losses that continues to shelter income long after the original depreciation was generated. Libman describes this as a compounding effect - not on the losses themselves, but on the capital that would otherwise have been paid in taxes and is instead redeployed.
The Stewardship Argument Behind the Strategy
Libman connects the tax strategy framework to a broader stewardship philosophy. For an investor who believes they are a faithful manager of capital - whether their own or their partners' - that responsibility extends to understanding the rules governing it. Overpaying taxes out of ignorance is not a neutral outcome.
"You can't manage well what you refuse to understand," Libman says. "Overpaying tax out of ignorance isn't humility - it's just leaving the field untended."
The biblical framing he uses - giving Caesar what Caesar is due, no more - is a precision argument. The obligation is to pay what is legally owed. Every dollar that leaves unnecessarily is a dollar that cannot be reinvested, donated, or deployed toward the investor's actual mission. At Investing With Purpose, that mission includes community impact, faith-driven stewardship, and long-term wealth building - none of which are served by overpaying a tax bill that good planning could have reduced.
How Investing With Purpose Structures for Tax Efficiency
At Investing With Purpose, Libman says the firm treats tax efficiency as a structural component of every acquisition - not an afterthought. Cost segregation studies are commissioned before properties close. The resulting depreciation is treated as a benefit layered on top of the property's standalone investment case, never as a component of the base return projection.
"We underwrite the property as a standalone, and then the tax benefit is kind of the cherry on top," Libman says. "We never make it part of our underwriting assumptions."
This separation keeps the investment thesis grounded in asset fundamentals while still delivering meaningful tax efficiency through K-1 losses that shelter distributions and other income. It also ensures that projected returns reflect the property's actual performance - not a tax outcome that depends on each investor's individual situation.
As 100% bonus depreciation becomes a durable feature of the tax landscape, investors who structure around it from day one of the calendar year - not in April - will compound that advantage across every acquisition, every hold period, and every exit. Those who continue filing reactively will keep paying more than they owe, one invisible year at a time.
More detail on the firm's acquisition and tax efficiency framework is available at https://iwpurpose.com/invest/index.html
About Investing With Purpose: Investing With Purpose is a faith-driven multifamily real estate firm based in Bluffton, SC. The firm invests in multifamily assets nationally, combining institutional-calibre investment management with an intentional values framework where capital meets calling. Learn more at https://iwpurpose.com/.
Disclaimer: This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
Contact Info:
Name: Steven Libman
Email: Send Email
Organization: Investing With Purpose
Website: https://iwpurpose.com/
Release ID: 89200365
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