In the world of depreciation planning, one small timing detail continues to fly under the radar — and it’s costing taxpayers serious money.

Most people fixate on what a property costs or how much they can write off. But the placed-in-service date — when the IRS considers a property ready and available for use — plays a crucial role in determining bonus depreciation eligibility for cost segregation studies.

And as bonus depreciation continues to phase out (or possibly bounce back), that timing has never been more important.

Why placed-in-service timing gets overlooked

The IRS defines “placed in service” as the moment a property is ready and available for its intended use.

For rentals, that means:

• It’s available for move-in, and,
• It’s listed or actively being shown.

But in practice, this definition gets misapplied. Some real estate owners assume the closing date is enough. Others delay listing the property until after the new year, missing key depreciation opportunities.

And that gap between intent and readiness? That’s where deductions quietly slip away.

Bonus depreciation: The clock is ticking

Under current law, bonus depreciation is tapering fast:

• 2024: 60%
• 2025: 40%
• 2026: 20%
• 2027: 0%

The difference between a property placed in service on December 31 versus January 2 can translate into tens of thousands in immediate deductions.

And just to make things more interesting — on May 9, the House Ways and Means Committee released a draft bill that would reinstate 100% bonus depreciation retroactive to Jan. 20, 2025. (The bill was passed last week by the House as part of the One Big Beautiful Bill and is now with the Senate.)

The result? Accountants now have to think in two timelines:

• What the current rules say;
• What Congress might say a few months from now.

It’s a tricky season to navigate — but also one where proactive advice carries real weight.

Typical scenarios where timing matters

Placed-in-service missteps don’t always show up on a tax return — but they quietly erode what could’ve been better results. Some common examples:

• End-of-year closings where the property isn’t listed or rent-ready until January.
• Short-term rentals delayed by renovation punch lists or permitting hang-ups.
• Commercial buildings waiting on tenant improvements before becoming operational.

Each of these cases may involve a difference of just a few days — but that’s enough to miss a year’s bonus depreciation percentage.

Planning moves for the second half of the year

As Q3 and Q4 approach, here are a few moves worth making:

• Confirm the service-readiness timeline with clients acquiring property in the second half of the year.
• Educate on what “in service” really means — closing isn’t enough.
• Create a checklist for documentation: utilities on, photos of rent-ready condition, listings or lease activity.
• Track bonus depreciation eligibility relative to current and potential legislative shifts.

For properties acquired late in the year, encourage clients to fast-track final steps. The tax impact of being placed in service by December 31 versus January 2 is larger than most realize.

If the window closes, there’s still value

Even if a property misses bonus depreciation, cost segregation still creates long-term savings — especially for high-income earners.

Partial-year depreciation still applies, and in some cases, Form 3115 can allow for catch-up depreciation in future years. The strategy may shift, but the opportunity doesn’t disappear.

Placed-in-service dates don’t usually show up on investor spreadsheets. But they’re one of the most controllable levers in maximizing tax savings. For CPAs and advisors, helping clients navigate that timing correctly can deliver outsized results.

Because at the end of the day, smart tax planning isn’t just about what you buy — it’s about when you put it to work.

South Africa’s case against executives in the biggest corporate fraud in the country’s history will be moved to a higher court for complex criminal trials, with their next hearing also pushed back to September.

Stéhan Grobler, the head of treasury at Steinhoff International Holdings NV when the furniture giant unraveled almost eight years ago, received extended bail along with two other former executives at Steinhoff subsidiaries and affiliates at a hearing in the Specialized Commercial Crimes Court in Pretoria on Friday.

Their case will be moved to the High Court, with their next hearing scheduled for Sept. 3 when a trial date is likely to be set.

The extra time will allow the prosecution to finalize investigations and secure a racketeering certificate, according to court proceedings, while prosecutors were also waiting for an affidavit from witnesses in Germany that arrived on Friday. A finalized charge sheet will be ready by June 17.

Grobler says he’s innocent of charges already set out by prosecutors including racketeering, manipulation of financial statements and three counts of fraud worth 21 billion rand ($1.2 billion). 

The collapse of Steinhoff, once feted for a gutsy entrepreneurial spirit that built a retail empire spanning Australia, Europe and the U.S., rocked South Africa as the company’s share price collapsed in December 2017, hitting everyone from staff and creditors to the government workers’ pension fund. About 230 billion rand was lost on the Johannesburg stock exchange in a matter of days.

Pressure has been building on prosecutors, especially after a 7,000-page report on Steinhoff’s dealings — compiled by auditor PwC in the wake of its collapse — was finally released six months ago. Former Chief Financial Officer Ben la Grange is the most senior Steinhoff executive to be jailed so far, but his plea deal last year — including a requirement to testify in the Grobler case — meant the scandal has yet to be fully aired in court.

Former Chief Executive Officer Markus Jooste died by suicide in March 2024. 

Steinhoff, which owned Conforama in France and Mattress Firm in the U.S., collapsed after auditors refused to sign off on its financial statements. That led to the start of police and regulatory investigations in both Europe and South Africa. The probe by auditor PwC uncovered €6.5 billion ($7.4 billion) of irregular transactions with eight firms over eight years.

Buried deep in the more than 1,000-page tax-and-spending bill that President Donald Trump is muscling through Congress is an obscure tax measure that’s setting off alarms on Wall Street and beyond.

The item — introduced in legislation that passed the House last week as Section 899 and titled “Enforcement of Remedies Against Unfair Foreign Taxes” — calls for, among other things, increasing tax rates for individuals and companies from countries whose tax policies the U.S. deems “discriminatory.” This includes raising tax rates on passive income, such as interest and dividends, earned by investors who are potentially sitting on trillions in American assets.

Cloaked in technicalities, the implication of the “revenge” measure, as it’s quickly becoming known, is clear to analysts: If signed into law, it would further drive away foreign investors at a time when their once ironclad confidence in Treasury bonds and other U.S. assets has already been shaken by Trump’s erratic trade policies and the nation’s deteriorating fiscal accounts.

“We’re already dealing with a market where Treasuries, to foreign investors, probably aren’t the most attractive investment,” said Michael Brown, a strategist at Pepperstone Group, a brokerage firm founded in Melbourne whose clients are all outside the U.S. Brown said he got so many inquiries from concerned clients that he quickly put together a report breaking down the measure. “If you’re now talking about massively unfavorable tax treatment, then it’s just another reason to stay away.”

Among those potentially affected: institutional investors including sovereign wealth funds, pension funds and even government entities, as well as retail investors and businesses with U.S. assets. 

The proposed tax is separate from Trump’s tariff-heavy trade agenda, which is now snarled in court, but the thrust is the same, and its aims align with some of the positions set forth by the economist Stephen Miran in a paper last November and those seeking a so-called Mar-a-Lago global restructuring accord. All seek to address perceived unfair treatment of the U.S. by the rest of the world using targeted tools designed to put the country on a more even footing. But after years of foreign investors piling into U.S. assets, experts fear the consequences of Section 899 may be far-reaching.

The provision amounts to “weaponization of U.S. capital markets into law” that “challenges the open nature of U.S. capital markets by explicitly using taxation on foreign holdings of U.S. assets as leverage to further U.S. economic goals,” George Saravelos, head of FX research at Deutsche Bank AG, wrote in a report on Thursday. “We see this legislation as creating the scope for the U.S. administration to transform a trade war into a capital war if it so wishes, a development that is highly relevant in the context of today’s court decision constraining President Trump on trade policy.”

Section 899 takes aim at countries including Canada, the U.K., France and Australia that impose “digital services taxes” on large technology companies such as Meta Platforms Inc. The clause also targets countries using provisions in a multi-country deal for minimum corporate taxes. 

The measure would boost the federal income tax rate on passive U.S. income earned by investors and institutions based in the targeted countries, first by five percentage points, then rising by another five points each year to a maximum of 20 points above the statutory rate.

‘Troubling’ for bonds, dollar

Morgan Stanley’s strategists included the provision in frequently asked questions related to the tax-and-spending bill and concluded that Section 899 would weaken the dollar and European stocks with U.S. exposure. Gilles Moec, the chief economist at AXA Group, said it could add to the pressure on long-term interest rates, which this month touched multiyear highs. Others see it dragging on the U.S. currency.

“It indeed sounds troubling,” said Rogier Quaedvlieg, senior U.S. economist at ABN Amro Bank NV. “By limiting new foreign demand, that would of course put pressure on the dollar.'”

The risks related to the section 899 provision are seen by some as even more pressing after the U.S. court order on Wednesday that blocked many of Trump’s tariffs on imports. Tariffs are considered a key source of revenue to fund Trump’s tax cuts, a signature part of his “big, beautiful bill.” Without them, the question is where the administration will find the money to fund them.  

On Thursday, a federal appeals court offered Trump a temporary reprieve from the ruling, and White House officials said they planned to continue defending the legality of their efforts on trade to the U.S. Supreme Court.

The intent of the measure appears similar in spirit to some ideas put forth in November by Miran while he was still working at hedge fund Hudson Bay Capital. Miran, now chairman of the White House Council of Economic Advisers, raised the possibility of imposing “user fees” on foreign investors in Treasuries as one option to help push down the dollar and address global trade imbalances. 

“The clause is clearly endorsed by the administration and designed to give Trump a negotiation tool for pressuring countries to drop digital services taxes and global minimum corporate income taxes, which he sees as unfairly targeting U.S. multinational companies,” wrote economist Will Denyer and Tan Kai Xian at Gavekal Research. “The problem is that before Trump has a chance to use the new tool, its very existence may unsettle bond markets.” 

“With tariff revenue more uncertain and less likely to offset tax cuts in the GOP budget bill, traders need to be prepared for tax changes on foreign holders, ultimately reducing demand for American financial assets,” said Michael Ball, a Markets Live macro strategist.

For now, the market reaction to Section 899 appears muted, at best. Still, U.S. assets as a whole have been underperformers this year as Trump’s policies put a dent in the narrative of “America exceptionalism.” 

The S&P 500 is up about 0.4% this year, compared with a 20% gain in the German benchmark and a 18% rally in Hong Kong. The Bloomberg Dollar Index slumped about 7%. The US Treasuries returned 2%, trailing the 5% gain in the global government bonds in dollar terms, according to data compiled by Bloomberg.

Under the surface

While some are skeptical if the Section 899 would survive on concern it would dampen foreign investment into the U.S., Signum Global Advisors predicts it will likely remain in the final version of the reconciliation package, in part because it has broad Republican support.

“We believe the president’s viewpoint is that there is such immense foreign appetite to invest in the U.S. that it is not at risk of being thrown off course,” according to Charles Myers, a former Wall Street executive who runs advisory firm Signum, and Lew Lukens, a partner at the firm.

To Pepperstone’s Brown, the reason markets haven’t reacted yet is because investors hadn’t fully grasped the significance of the clause. But they’re starting to now.

“It’s only as the dust has settled that people are thinking that maybe there are some things lurking under the surface of the bill we should pay a little bit more attention to,” said Brown. “And I think this section 899, this is probably one of them.”