Bonus depreciation acquisition practice
Year-one tax savings can equal or exceed the equity invested in a gas station.
Gas station acquisition advisory for private buyers, family offices, and institutions.
100% bonus depreciation on a qualifying gas station
Typically 80–90% of the purchase price, deducted in year one. Whether a site qualifies, and how much of its basis does, depends on the property and your own tax position.
Why does a gas station depreciate differently from other commercial real estate?
Most commercial buildings depreciate over 39 years. A gas station is mostly equipment and site work, much of it deductible in year one under bonus depreciation.
Does every gas station qualify?
No. Qualification turns on the retail motor fuels outlet tests — a determination for your CPA. My role is to bring a property worth the analysis.
What happens at exit?
The deduction is deferral, not forgiveness — a portion returns at ordinary rates on sale. A 1031 exchange defers it again, and the write-off can repeat on the next property.
$5,000,000price$4,250,000deducted$1,572,500saved at 37% federal
Drag the slider or pick a starting point to see your scenario.
6.50% cap · 65% LTV · 6.16% rate (SOFR + 250) · DSCR 1.27x
Good estimate for a large regional station today: 6.16% — SOFR 3.66% (Sep 2026) + 250 bps.
Federal 37% only — pick your state to add the state benefit where it conforms.
At 37.0% combined (federal only — pick your state to add the state benefit — choose)
90%of your $1,500,000 equity, back in year-one tax savings.
At these settings the estimated year-one savings recover about 90% of the $1,500,000 of equity you put in. Credit tier, leverage and your state move this figure; the assumptions below show how. Talk it through →
Whether you can use the loss this year depends on your income to offset set it →
See the deal and assumptions
How the estimate is built
Federal 37% only — pick your state to add the state benefit where it conforms.
Can you use it this year? (§469)
Changes when you collect the savings, not how much. Passive income — or ordinary income if you qualify as a Real Estate Professional.
Your $2,000,000 of income absorbs $2,000,000 of the write-off this year — about $740,000 of the savings above. The remaining $1,642,857 carries forward under §469 and is used against the property’s own income in the years below.
What counts as income you can offset
Dollar-for-dollar: passive income — rents, LP distributions, passive business income. With Real Estate Professional status: W-2, business, and other active income. Portfolio income — dividends, interest, stock gains — can’t be offset currently; those losses carry forward.
Yield
Debt underwritten at SOFR + 250 bps (6.16% at 3.66% SOFR, Sep 2026) · 1.20x DSCR floor · 65% LTV ceiling
Five-year picture
Year one uses only the $2,000,000 of income you set above; the property’s own income absorbs the carryforward from year two. $471,732 of the $3,642,857 write-off is still carried forward past year five.
Assumes 2% annual rent escalation for this tier; carryforward is absorbed against the property's own income. Estimates.
Assumes 85% of price as bonus-eligible basis; the yield lines use a cap of 6.50% and debt underwritten at SOFR + 250 bps (6.16% at 3.66% SOFR, Sep 2026) over 25-yr amortization. Every deal moves these — that’s the conversation.
Qualification
Who This Works For
The deduction only helps if you have income it can offset. Confirm it with your CPA.
Passive income
Offsets dollar for dollar.
- Rental income
- Real estate LP or fund distributions
- Passive S-corp or partnership income
- Oil, gas, and mineral royalties
- Trust or estate distributions
Real estate is your work
Unlocks wages and active income.
- Development · redevelopment
- Construction · reconstruction
- Acquisition · conversion
- Rental · operation · management
- Leasing · brokerage
Any of these trades or businesses counts under §469(c)(7)(C). The test is 750+ hours and more than half your working time, documented. W-2 wages count at 5%+ ownership.
A 1031 that did not close
The gain is taxable this year.
- Missed the 45-day identification
- Replacement property fell out
- Took boot, or came in short
Gain from selling a passive rental is passive income. A purchase placed in service the same year can offset it.
Tenant credit
Credit changes the yield, not the depreciation.
Single-tenant, net-leased properties on 10–20 year leases — the operator pays taxes, insurance, and maintenance. Credit sets the cap rate, so what moves is the equity, not the deduction. Site-level differences can still shift the qualifying basis.
| Tier | Cap rate | Leverage | $1 investment |
|---|---|---|---|
| National7-Eleven · Circle K · Casey’s · QuikTrip · Maverik | 5.00–5.50% | 50–60% | $0.79 |
| Large regionalGPM · United Pacific · Gas Express · Alta · Yesway | 5.75–6.75% | 60–65% | $0.90 |
| Small regionalPanthers Petroleum · ULE · AAA Management · Pinnacle | 7.00–8.50% | 65–75% | $1.05 |
Operators are examples, not a complete list. Ranges are indicative — every deal moves them. Savings per $1 investment at the 37% top federal rate.
Process
How the Work Runs
The order is always the same: tax position first, property second.
Establish the tax position
What income you have to offset, and whether bonus depreciation is worth pursuing at all.
Identify the opportunity
Sourcing the asset that fits the position, the timing, and the capital.
Run the transaction
Managing the deal, sourcing debt, and arranging and overseeing diligence through closing.
Current opportunities
What’s available now
Most of what I work on is not posted. Send your criteria below and I will come back with what fits, including what has not hit the market.
Send your buy-side criteria
Asset type, markets, price range, timing. I’ll reply within a day.
The buyer’s guide
Gas Stations & Bonus Depreciation
An 8-page buyer’s guide
What’s inside:
- The three qualification tests, and which one most sites pass
- The arithmetic on a $5,000,000 purchase, line by line
- Two deals side by side — identical savings, different equity
- Recapture, environmental, and EV adoption
- Read it on the site →
Tell me what you’re working on.
Buying, selling, leasing, or looking at a bonus depreciation purchase — a short note is plenty. I reply within a day.
Illustrative estimates. Not tax, legal, or investment advice. Consult your CPA and attorney.