Examples · made-up property
Tax studies for a build-to-rent community
Builders and developers who build homes to rent instead of to sell.
How it works for this kind of property
Homes you build to keep are depreciable rental property, not inventory. The homes are classified like single-family rentals, and the roads, paving, sidewalks, site utilities and fencing the owner keeps are 15-year site work.
More on how it works
You do not film every home. The walk covers one home of each floor plan, and the study applies it to each home of that plan.
The energy-efficient home credit (45L) only applies to certified homes sold or leased before July 1, 2026. Homes leased later do not qualify; earlier ones may, with a certificate.
Which of the 8 studies fit
| Study | Example result |
|---|---|
| Faster depreciation (cost segregation) | Counted in this example |
| Catch-up on past years | Fits, not counted here |
| Inventory cost rules and accounting methods | Fits, not counted here |
| When home-sale income is taxed | Doesn't apply here |
| Energy-efficient home and building credits | Doesn't apply here |
| Energy-efficient buildings and solar | Doesn't apply here |
| Research and hiring credits | Worth a question |
| Property and sales tax | Fits, not counted here |
What the engine found, for your CPA
Example: We checked 69 strategies: 12 fit, 6 need a question, 47 don't apply, and 4 are protection checks.
- Faster depreciation (cost segregation): 15-year site work (paving, lighting, fencing, landscaping); Bonus depreciation; Classification rules for this property type; Cost segregation on a building you built; Build-to-rent: homes kept as rentals
- Catch-up on past years: Accounting method changes (Form 3115)
- Inventory cost rules and accounting methods: Cash method for small businesses; Small business exemption from the 263A cost rules
- When home-sale income is taxed: No homes, condos or lots sold under contract.
- Energy-efficient home and building credits: No ENERGY STAR or DOE Zero Energy Ready certification for the units; 45L requires certification before the credit is claimed.
- Energy-efficient buildings and solar: No commercial or 4+ story multifamily building the taxpayer built or improved.
- Research and hiring credits: Question: Paid family leave credit (45S)
- Property and sales tax: Property tax review
Common questions
We started building to sell and now we are keeping the homes. Does that change anything?
Yes. Homes moved from inventory to rentals start depreciation when they are ready to rent. Our engine checks this conversion as its own strategy and your CPA confirms the dates.
Are the roads and utilities part of the study?
The roads, paving, sidewalks, site utilities and fencing the owner keeps are 15-year site work in the study. Anything dedicated to the city is not yours to depreciate.
Can we still claim 45L?
Only for certified homes sold or leased before July 1, 2026. The 2025 law ends the credit for homes acquired after June 30, 2026.
The rules behind it, for your CPA
- Pub. 946 (2025) Table B-1 asset class 00.3 Land Improvements
- 26 U.S.C. 168(b)(2)(A)
- Pub. 5653 Ch. 2 L(5)
- Notice 2026-11
- Treas. Reg. 1.168(k)-2(b)(3) original use / used property (5-calendar-year lookback)...
- Instructions for Form 4562 (2025)
- 26 USC 1221(a)(1), (a)(2)
- 26 USC 1231(b)(1), (c)
- Malat v. Riddell, 383 U.S. 569 (1966)
- Rev. Proc. 2015-13 (as modified)
- Rev. Proc. 2025-23, as modified by Rev. Proc. 2025-28 and Rev. Proc. 2026-32
- Instructions for Form 3115 (Rev. December 2022)
Every number on this page is an example for a made-up property, computed by our engine. Not tax advice; your CPA reviews and files.