Compass CPA, PC

Renovating your investment property?

That renovation may not need to be depreciated over 39 years.

Most property owners assume renovations get written off slowly over decades.

Not always.

If your improvements qualify as Qualified Improvement Property (QIP), you may recover those costs much faster—and potentially deduct 100% immediately depending on timing.

This matters especially if you own:

✔ Commercial real estate
✔ Medical office buildings
✔ Office space
✔ Retail property
✔ Certain short-term rentals operating like hospitality businesses

Examples that may qualify:

- Interior flooring upgrades
- Lighting improvements
- Cabinet installation
- Interior electrical work
- Non-structural partitions

But many investors get this wrong.

Roof? No.
Building expansion? No.
Exterior improvements? Different category.

Timing matters too.

A renovation completed after the property is placed in service can create a very different tax outcome than the same renovation completed beforehand.

We just published a full breakdown explaining:

→ What qualifies
→ What doesn’t
→ STR classification considerations
→ Bonus depreciation timing strategies
→ Common costly mistakes

Read the full blog here → https://tinyurl.com/47322ju6

A pattern I keep seeing with high earners:

Someone starts making $300K+…
but they’re still using the same tax strategy they had at $120K.

Not because they’re doing anything wrong
it’s just the strategy never evolved.

At lower income levels, tax savings usually come from:
deductions, retirement contributions, basic planning.

But once income gets higher, everything shifts.

Your taxes are now driven more by:
how you earn income,
how your investments are structured,
how your entities are set up,
and when income hits your return.

That’s where the real opportunities (and mistakes) happen.

The issue is most people keep focusing on small tactics…

when what they really need is a different structure.

I see this all the time reviewing high-income households.

If your income has grown but your strategy hasn’t,
it might be worth taking a second look.