Bonus Depreciation For Your STR Business: Smart Devices, Smarter Tax Moves

Your Timing is Great

Have you been waiting for the right time to make a tech investment across your short-term rental properties? Providing smart in-property devices as part of your guest engagement strategy is an excellent way to differentiate your properties. AIPEX turns a normal Alexa device into a purpose-built hospitality tool that delights customers. Plus it gives you an edge on communicating with guests which leads to more direct bookings for the future. With recent tax code changes, now is the right time to take advantage.

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Background: OBBA and the Return of 100% Bonus Depreciation

In July 2025, the One Big Beautiful Bill Act (OBBA) was signed into law, bringing back 100% bonus depreciation for business assets. Before OBBA, bonus depreciation was being phased down (it was set to drop to 40% in 2025), but OBBA permanently reinstated a full 100% first-year depreciation for qualifying property acquired and placed in service after January 19, 2025. This means businesses and rental property owners can once again immediately deduct the entire cost of eligible assets in the year they’re placed in service, rather than depreciating over many years. The goal of this reinstatement is to spur investment – allowing upfront write-offs of equipment and improvements to improve cash flow and reduce taxes.

Key Point: OBBA’s bonus depreciation provision is not limited to 2025 alone – it’s now a permanent part of the tax code for assets meeting the criteria. In other words, assets purchased and placed in service after the effective date (1/19/2025) qualify for 100% expensing in 2025 and in future years, unless the law changes again.

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Eligibility of Amazon Alexa Devices

Amazon Alexa smart devices (such as Echo Show models) used in rental properties are eligible for 100% bonus depreciation under OBBA, as long as they are used for your business (e.g. provided for guests in a rental unit). These devices count as tangible personal property – essentially electronic equipment – with a tax recovery period well under 20 years (typically 5-year class life). Under OBBA’s rules, most tangible personal property with a class life of 20 years or less qualifies for 100% bonus depreciation‍. For rental owners, this includes items like appliances, furniture, and other equipment you buy for the property. A voice-assistant device or smart display in a rental home falls in this category (similar to a small appliance or electronic equipment). In short, if you purchase Echo Show devices for use in your rental business, you can write off 100% of their cost in the first year under the OBBA provisions.

To be sure the device qualifies, note a couple of criteria:

• Business Use: The Echo Show must be used in your income-producing property (e.g. placed in a rental unit for guests). Personal-use items aren’t deductible.
• New or New-to-You: The bonus depreciation covers new equipment or used devices that you purchase – it’s okay if the item is used, as long as you had not previously used it personally. (For example, you can’t take bonus depreciation on an Echo Show you already owned and then simply moved into the rental; but you can if you buy a new one or a used one from a store, provided this is its first use in your business.)

If these conditions are met, an Alexa/Echo device is treated like any other eligible appliance or tech gadget for depreciation purposes – meaning you can deduct the full cost in one go.

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Timeframe and Deployment Deadlines

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Timing matters

To get 100% bonus depreciation, the device must be acquired and placed in service after January 19, 2025‍. “Placed in service” means the Echo Show is set up and ready for use in the rental property. For example, if you bought the device in February 2025 and had it installed for guests by March 2025, it qualifies in your 2025 tax year. OBBA’s rules are permanent going forward, so assets placed in service in 2025 and in future years (2026, 2027, etc.) remain eligible for 100% expensing There isn’t an expiration date currently – unlike the prior law which was winding down – so this benefit should be available beyond 2025 for any qualifying purchases.

(Note: Property acquired before the OBBA cutoff doesn’t get 100% in 2025. For instance, if you had bought and installed a device in early January 2025 before the law’s effective date, that asset would fall under the old 40% bonus depreciation rules for 2025. Only those placed in service after Jan 19, 2025 get the 100% rate.)

Year-end consideration

If you want to claim the deduction on your 2025 taxes, be sure the Alexa device is installed and in use before the end of 2025. Any qualifying device placed in service during 2025 can be fully written off on that year’s return. If you wait and put the device in service in January 2026, you’d simply take the deduction on your 2026 return instead. The full expensing applies in the tax year the item is first placed in service.

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How to Claim Bonus Depreciation for These Devices

Claiming the bonus depreciation on an Echo Show (or any eligible asset) is straightforward and done when you file your tax return. Here are the basic steps and considerations for property managers or rental owners:

1. Document the Purchase: Keep the receipt or invoice for the Echo Show purchases, and note the date they were placed in service (installed in the rental). Good record-keeping is important to substantiate your deduction.
2. File IRS Form 4562 (Depreciation and Amortization): When preparing your tax return, report the new device on Form 4562. This form is where you list depreciable assets and indicate any special depreciation deduction. For an Echo Show, you would include it as 5-year property and then elect the 100% bonus depreciation (often called “additional first-year depreciation”) for its full cost. In practice, most tax software will have you input the asset details and will automatically apply the bonus depreciation if eligible.
3. Attach to Your Return: Form 4562 will be filed with your income tax return (for a rental property owned by an individual, depreciation flows through to your Schedule E and then Form 1040; for an LLC/Corp, it attaches to that business return). The key is that Form 4562 is where the bonus deduction is claimed. No separate special form is needed for OBBA – it uses the existing depreciation form.
4. No Ceiling (But See Section 179): Unlike Section 179 expensing, bonus depreciation has no dollar limit and can even create a net loss on your tax return. This means if the full deduction of your devices (plus other expenses) exceeds your rental income, you might have a taxable loss – which could offset other income or be carried forward, subject to passive activity loss rules (explained below). By contrast, Section 179 has caps and cannot exceed taxable business income in most cases. With bonus depreciation reinstated at 100%, many rental owners will simply use bonus rather than Section 179 for these assets, unless state tax rules make Section 179 more favorable (see below).
5. Consult If Needed: If you’re unsure, it’s wise to double-check the latest IRS guidelines or consult a tax professional – especially if you have multiple assets or a complex situation. But for a simple purchase like a smart device, your tax preparer or software should handle the bonus depreciation once you input the asset’s cost and in-service date.

Tip: There is no separate election required to take bonus depreciation – it is the default if an asset qualifies. If for some reason you didn’t want to take the 100% write-off (e.g. you prefer to spread the deduction out), you would have to elect out of bonus for that asset class on your tax return. Most taxpayers in a rental business will prefer the immediate deduction, but it’s good to know you have a choice (you might opt out if you expect your income to rise and you’d rather save some depreciation for future years.

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