100% bonus depreciation is back and it is permanent. But you only get the full benefit if your books are set up to capture it. Here is how a property bookkeeper records a cost segregation study in AppFolio, Buildium, and QuickBooks Online so the deduction actually shows up on your taxes.
What changed for landlords
In 2025, a new law called the One Big Beautiful Bill Act (OBBBA) brought back 100% bonus depreciation and made it permanent. It was signed on July 4, 2025.
Here is what that means for you. If you buy or improve a rental property and it has parts that wear out within 20 years, like appliances, flooring, fixtures, fencing, or landscaping, you can deduct the full cost of those parts in the first year. This applies to property you bought and put into service after January 19, 2025. The IRS confirmed the rules in Notice 2026-11 in January 2026.
The short version: this is the law now, and your books need to reflect it.
What a cost segregation study does
By default, a rental building is deducted slowly. The IRS spreads it over 27.5 years.
A cost segregation study speeds that up. It breaks your building into pieces and moves the faster wearing parts into shorter categories, like 5 year, 7 year, and 15 year buckets. Those shorter buckets are the ones that qualify for 100% bonus depreciation.
The study gives you a report. It lists each part, its value, and its new category. That report is what your bookkeeper uses to update your records. Skip this step and your tax return will be wrong.
How to record it in AppFolio
AppFolio runs your property accounting, but it does not calculate tax depreciation. So you handle the bookkeeping side here and let your CPA handle the tax side.
- Add matching depreciation accounts so the value goes down correctly over time.
- Create accounts in your chart of accounts that match the study. For example, one for 5 year parts, one for 15 year parts, and one for the rest of the building.
- Use a journal entry to move the value out of the single building account and into the new ones, using the numbers from the study.
- Save the study report with the property so it is ready if anyone asks for it.
- Send your reports to your CPA, who calculates the deduction and files it.
How to record it in Buildium
Buildium works the same way. It handles your books and reports well, but it does not calculate bonus depreciation.
Set up your asset accounts and depreciation accounts by category, post the journal entry from the study, keep the report on file, and send your financials to your CPA for the tax part. The goal is clean books that match the schedule your CPA produces.
How to record it in QuickBooks Online
QuickBooks Online has a Fixed Assets tool in the Advanced and Accountant versions. It tracks your assets and figures out basic book depreciation for you. One thing to know: it does not calculate bonus depreciation. That part is done in your CPA’s tax software and reported on a form called 4562, which flows to your Schedule E.
Here is the simple setup:
- In your chart of accounts, create fixed asset accounts for each category from the study (5 year, 7 year, 15 year, and the rest of the building).
- If you are on QuickBooks Advanced, use the Fixed Assets tool to record each asset’s cost and date for your own books.
- Post the change so your balance sheet shows the new values.
- Give the schedule and reports to your CPA. They claim the 100% deduction at tax time.
The bottom line: your software keeps the books clean, and your CPA claims the deduction. A bookkeeper who understands both keeps them lined up.
Common questions
What is 100% bonus depreciation for rental property in 2026?
It lets you deduct the full cost of qualifying parts of your property in the first year instead of spreading it out over decades. The OBBBA made it permanent for property bought and put into service after January 19, 2025.
Do I need a cost segregation study to claim it?
Not always, but it is how most landlords find the parts that qualify. The study moves pieces of your building into the shorter categories that are eligible.
How do I record cost segregation in QuickBooks Online?
Create fixed asset accounts for each category from the study, post the change so your balance sheet is right, and give the schedule to your CPA. QuickBooks tracks book depreciation. The tax deduction is handled in tax software.
Does AppFolio handle bonus depreciation?
AppFolio tracks the asset accounts on the bookkeeping side, but it does not calculate bonus depreciation. You record the change in the books and send it to your CPA for the tax part.
What qualifies for bonus depreciation under the OBBBA?
Property that wears out within 20 years, usually things like appliances, flooring, fixtures, fencing, and landscaping, bought and put into service after January 19, 2025.
Get your books ready
FONDiFi is virtual bookkeeping and property management support built for real estate. We work inside AppFolio, Buildium, and QuickBooks. We record your cost segregation numbers, keep your asset accounts clean, and hand your CPA tax ready financials so no deduction slips through.
[Talk to FONDiFi about getting your 2026 books ready.]
This article is for general information and is not tax advice. Your situation is unique, so work with your CPA on your study and your return. Official IRS sources: Notice 2026-11, the OBBBA provisions page, and Publication 527.
