The calendar matters for real estate investors this year. Under the 2025 federal tax law, 100% bonus depreciation is back for good, Opportunity Zones become permanent on January 1, 2027, and any 1031 exchange you start this fall has deadlines that can run into tax season. Here is what Louisville investors should look at before December 31. This is general information, not tax advice; run every move past your CPA.

1. Bonus depreciation is back at 100%

Depreciation lets you deduct the cost of a building over time: 27.5 years for residential rentals and 39 years for commercial property. Bonus depreciation lets you deduct certain parts of a property in the first year instead.

• The 2025 tax law made 100% bonus depreciation permanent for qualifying property acquired after January 19, 2025.
• It applies to parts of a property with a useful life of 20 years or less, not the building itself. Think appliances, carpet, cabinets and fixtures (often 5 or 7 years) and land improvements like parking lots, fencing and landscaping (15 years).
• A cost segregation study is how you find those parts. An engineer or specialist breaks the purchase price into categories so more of it can be deducted sooner.
• To count for 2026, the property generally has to be placed in service, meaning ready and available to rent, by December 31.

Read more in our guide to cost segregation.

2. Section 179 limits went up

Section 179 lets businesses deduct certain equipment and improvements right away. The limit rose from $1 million to $2.5 million, with the phaseout starting at $4 million instead of $2.5 million. For rental owners, it can apply to some improvements to nonresidential property, such as roofs and HVAC (heating and air). Ask your CPA whether it fits your properties.

3. Opportunity Zones become permanent January 1, 2027

Opportunity Zones are census tracts where investors can defer and reduce capital gains tax by investing through a Qualified Opportunity Fund.

• Starting January 1, 2027, the program is permanent, with a five-year deferral on new investments.
• Investments held five years get a 10% step-up in basis, or 30% in qualified rural zones.
• Gains on the investment itself can be tax-free if you hold it at least 10 years.
• Gains deferred under the original program are still due to be recognized at the end of 2026. If you are thinking about an Opportunity Zone investment in the last weeks of 2026, ask your CPA whether waiting until January makes more sense.

See our page on Louisville and Southern Indiana development incentives.

4. Watch the year-end 1031 trap

A 1031 exchange lets you defer tax on a sale by buying another investment property. You have 45 days to identify replacement properties and 180 days to close. But the 180 days end early if your tax return is due first. If you sell in November or December, your return due date in April can cut your exchange short unless you file an extension. Read our Kentucky 1031 exchange guide, and if your clock is already running, see 1031 deadline help.

5. Buyers have leverage on 2+ unit properties right now

If you are buying before year-end, Louisville's commercial 2+ unit market (duplexes through apartment buildings) has about 8.1 months of supply, more than double a balanced market. There are 146 2+ unit properties for sale in Jefferson County right now. Nationally, late payments on apartment loans in commercial mortgage bonds reached 8.04% in September, which means more owners under pressure to sell.

6. What changes January 7, 2027

A new federal law bars any company that controls 350 or more single-family homes from buying more, starting January 7, 2027, with an exception for build-to-rent. Small and mid-size Louisville investors are not affected, and some may face fewer bids from the biggest buyers.

A year-end checklist

• Close and place in service any purchase you want depreciated in 2026.
• Ask about a cost segregation study on anything bought since January 20, 2025.
• If you sold this year, decide on a 1031 or an Opportunity Zone plan with your CPA, and watch the deadlines.
• Plan big improvements around the Section 179 limits.
• Pull your rent rolls and expenses now, before your CPA asks.

Frequently asked questions

Can I take bonus depreciation on a rental house?

Not on the building itself, but often on parts of it. A cost segregation study separates out items like appliances, flooring and land improvements, which can qualify for 100% bonus depreciation.

Should I invest in an Opportunity Zone fund before the end of 2026?

Talk to your CPA first. The permanent program starts January 1, 2027 with new rules, and gains deferred under the original program are due at the end of 2026.

What is the 180-day 1031 rule?

You must close on your replacement property within 180 days of selling, or by your tax return due date if that comes first. Filing an extension can keep the full 180 days.

Does the 350-home rule affect me?

Only if you control 350 or more single-family homes. Most Louisville investors are far below that.

Find your next deal before December 31

Text or email Winner Realty at (502) 305-8915 or Rob@thewinnerrealty.com with your buy box, and we will send 2+ unit and single-family deals that fit, including off-market ones from our investor network.

Sources: CBIZ on 2026 tax rules (Jan 14, 2026); Greenberg Traurig on the ROAD to Housing Act (Jul 2026); Trepp delinquency data via Scotsman Guide (Oct 6, 2026); Louisville MLS (Flexmls), Jefferson County, pulled Oct 26, 2026. Not tax or legal advice.