Bonus depreciation is a tax strategy that allows real estate investors to accelerate depreciation deductions—often front-loading tax losses in the early years of ownership. Through cost segregation studies at the property level, portions of RV park assets may qualify for accelerated depreciation, potentially offsetting taxable income while maintaining exposure to cash-flowing real estate.
RV parks include infrastructure, site improvements, utilities, and other components that may be depreciated over shorter lives than traditional commercial buildings. Cost segregation studies can reclassify eligible components, enabling accelerated depreciation in earlier years.
While depreciation benefits are traditionally associated with hands-on ownership, professionally managed real estate funds can implement cost segregation and depreciation strategies at scale—without requiring investors to manage assets directly.
Bonus depreciation does not change the underlying economics of the investment. Instead, it may shift the timing of deductions earlier in the hold period, which can improve after-tax cash flow efficiency for some investors over time.
Consider a hypothetical $1,000,000 share of an RV park acquisition. After backing out land, which is not depreciable, $800,000 of improvements remain. A cost segregation study typically reclassifies 60% to 80% of RV park improvements into 5-, 7- and 15-year property.
Under current law, that reclassified amount may qualify for 100% bonus depreciation in the year the property is placed in service. For an investor with sufficient passive income, a deduction of that size can materially reduce taxable income from the investment in year one, even while the property produces positive cash flow.
Hypothetical and for illustration only. Allocations, study results and tax outcomes vary by property and investor. Consult your CPA or tax advisor.
Illustrative Year-One Math
RV parks are unusual among real estate asset classes: most of their value sits in land improvements and site infrastructure rather than in a long-life building.
Land improvements
15-year property
Personal property
5- and 7-year property
Because so much of an RV park's improved basis falls into these categories, parks often generate a larger share of first-year depreciation than apartments, self-storage or other commercial assets, where most value sits in a 27.5- or 39-year structure.
The One Big Beautiful Bill Act, signed in 2025, permanently reinstated 100% bonus depreciation for most qualified property acquired and placed in service on or after January 20, 2025. This reversed the prior schedule, which had phased the benefit down toward zero.
The practical effect: short-life property identified in a cost segregation study can generally be deducted in full in the year it is placed in service. Acquisition timing and tax planning now go hand in hand.
Bonus depreciation is a timing benefit, not free money. Several rules shape who benefits and by how much:
For most investors, losses from a passive real estate investment can only offset passive income, not wages or portfolio income. Unused losses generally carry forward.
Accelerated deductions may increase recapture tax when the property is sold, shifting tax rather than eliminating it.
Deductions cannot exceed an investor's basis in the partnership.
Some states do not follow federal bonus depreciation rules and require addbacks.
None of this is tax advice. The right way to evaluate suitability is a conversation between you, your CPA and the fund's offering documents.
100% bonus depreciation allows qualifying assets to be written off in full in the year they are placed in service, rather than being depreciated over several years. This accelerates tax deductions and can reduce current taxable income (subject to applicable tax rules and limitations).
No. Tax outcomes vary based on individual circumstances, including income, passive activity rules, and filing status.
Accelerated depreciation may increase depreciation recapture upon sale. The timing and impact depend on each investor’s tax situation and should be reviewed with a qualified advisor.
Investors typically receive a Schedule K-1 reflecting their share of income, losses, and depreciation. Timing may vary.
No. This information is for educational purposes only and should not be construed as tax, legal, or investment advice.
I’ve worked extensively with the Blue Capital and Blue Metric teams for several years, and I can confidently say they stand out as one of the most trustworthy and high-performing operators in this space.
I was first introduced to John when he acquired his very first RV park. At that point, he was just dipping his toe into the industry. Since then, I’ve closed more than 25 loans with him and his team, and I’ve watched them scale into one of the most sophisticated, credible, and respected groups in the RV park sector.
What differentiates this team is their conservative underwriting, deep expertise, and integrity. In my role, I oversee the appraisal and lending process for these deals, and I consistently see their projections come in realistic, supportable, and often conservative compared to the market. Their assumptions hold up under third-party scrutiny, and in many cases, the assets appraise higher than expected due to their disciplined approach to acquisitions and operations.
What I respect most is their certainty of execution. When Blue Capital/Blue Metric signs a PSA, their word is as good as gold. They close on time, they do what they say they will do, and they treat every stakeholder – from lenders to investors to vendors – with fairness, respect, and professionalism. Integrity can be rare in real estate, and their honesty, transparency, and follow-through truly stand out.
I look forward to continuing to work with them, and I have no hesitation recommending them to lenders, partners, or investors who value experience, conservative underwriting, and strong execution.
Mordechai (Mordy) Jurkowitz
Director – Princeton Capital Group (lender to Blue Capital and Blue Metric)