Reference · Tax

RV Park Bonus Depreciation: How Much Qualifies in Year 1

Bonus depreciation lets an owner deduct the full cost of qualifying property in the year it is placed in service, instead of spreading the deduction across decades. RV parks and RV resorts rank among the highest asset classes in real estate for bonus depreciation relative to acquisition price, because most of what an owner buys is not a building.

The rule in one paragraph

Under IRC §168(k), property with a recovery period of 20 years or less is eligible for bonus depreciation. Buildings are not: commercial real property depreciates over 39 years and residential rental property over 27.5. But roads, utility runs, water and sewer lines, electrical pedestals, pads, landscaping, fencing, signage, playgrounds, pools, and personal property inside amenity buildings are 5-, 7-, and 15-year property. On a typical RV park, those items are not a rounding error; they are the majority of the purchase price.

Why RV parks score unusually well

An apartment building is mostly building. An RV park is mostly ground. The revenue-producing asset is a graded, powered, plumbed site with a road to it, and almost every component of that site has a short recovery period. That is the structural reason cost segregation benchmarks put RV parks and RV resorts among the highest short-life allocations of any real estate class. On a property with minimal permanent structures, as high as 80% of purchase price can be eligible for Year 1 bonus depreciation, subject to confirmation by a cost segregation study.¹

An RV park with a large clubhouse, a lodge, or extensive permanent buildings will score lower. Allocation is a fact about the specific property, never a rule of thumb applied sight unseen.

What the 2025 law changed

Bonus depreciation was scheduled to phase down to zero. The One Big Beautiful Bill Act, enacted July 4, 2025, permanently restored 100% bonus depreciation for qualifying property placed in service after January 19, 2025.² Practically, this removed the phase-down clock that had been driving acquisition timing decisions since 2023.

The limits nobody should skip

Placed in Service, Not Necessarily When Purchased

The deduction attaches to the year the property is placed in service, which for an operating RV park is generally the year of acquisition, not the year a contract is signed.

Passive Activity Loss Rules

For most limited partners, depreciation allocated by a fund is a passive loss. Passive losses offset passive income. Unused amounts generally carry forward until there is passive income to absorb them, or until they become allowable under the applicable disposition rules.³

Basis and At-Risk Limits

A partner cannot deduct losses in excess of basis, or beyond amounts at risk. These tests are applied before the passive rules.

Recapture on Sale

Accelerated deductions reduce basis. A portion of the benefit is typically recaptured at sale, which makes bonus depreciation primarily a timing and present-value advantage rather than permanent forgiveness.

State Conformity Varies

Several states treat bonus depreciation differently than the federal government does. A deduction taken at the federal level may be added back on a state tax return.

How this fund handles it

The Bitcoin Outdoor Hospitality Fund commissions a cost segregation study on each acquisition and allocates 100% of the resulting bonus depreciation benefit to its limited partners, not to management, subject to partnership tax rules and each investor’s individual limitations. Whether that deduction is useful to you depends on your income types, passive activity position, professional designation, state of residence, and other factors. If it is not useful in your situation, it is better to establish that before investing.