It’s that time of year again — not just for wrapping gifts, but for wrapping up your real estate books.
As 2025 winds down, smart Indianapolis investors are making their final tax moves to maximize deductions, defer capital gains, and set themselves up for a stronger 2026.
Whether you own one duplex or a dozen rentals, a few strategic decisions now can mean thousands saved come tax season.
Here’s your guide to the best year-end tax strategies for real estate investors in Indiana — plus a quick reminder that we’re not tax professionals (so always verify with your CPA before taking action).
⚠️ Disclaimer
Roots Realty Co. is not a tax, legal, or financial advisory firm. The information below is for educational purposes only. Always consult a qualified CPA or tax professional for personalized guidance on your situation.
1. Review Your Income and Expense Records
Start by tightening up your books before December 31.
Go through your income statements, repair receipts, and invoices to make sure you’re capturing every deductible expense.
Common deductions for Indy investors include:
Mortgage interest
Property taxes
Insurance premiums
Repairs and maintenance
Property management fees
Utilities for vacant units
Mileage and travel to properties
💡 Pro tip: Track every small cost — from paint brushes to parking — in your accounting software or spreadsheet. It all adds up at tax time.
2. Prepay and Accelerate Deductions
If you’ve got maintenance or service bills coming up, pay them before year-end to shift those deductions into 2025.
Examples:
Prepay January’s property management or insurance fees.
Schedule HVAC servicing or appliance replacements in December.
Stock up on repair supplies before the year closes.
This “bunching” strategy helps reduce taxable income now — a classic move for active landlords.
3. Take Advantage of Bonus Depreciation (While You Still Can)
2025 is the final year of generous bonus depreciation before it phases down again in 2026.
What that means for Indiana investors:
You can still accelerate depreciation on qualifying improvements (e.g., flooring, appliances, HVAC systems).
Starting in 2026, the rate drops to 40%, meaning less upfront tax benefit.
If you bought or rehabbed a property recently, ask your CPA about a cost segregation study — it can separate building components into faster-depreciating categories, improving your cash flow.
4. Reevaluate Your Ownership Structure
If your rentals are still held personally, it might be time to explore an LLC or S-corp setup.
Pros:
Pass-through taxation (no double tax)
Easier expense tracking
Liability protection
Cons:
Slightly higher admin costs
Financing can be trickier for multi-member LLCs
Every investor’s setup is different — your CPA can help you decide if 2026 is the right time to restructure.
5. Harvest Capital Losses
If you sold underperforming assets this year (real estate or stocks), use capital losses to offset gains.
Example:
You made $40,000 in gains on one sale but lost $15,000 on another — you’ll only pay tax on the $25,000 net gain.
You can also apply up to $3,000 in excess losses toward your ordinary income, with the remainder rolling forward to future years.
6. Reinvest Through Capital Improvements
One of the smartest ways to reduce taxable income is to reinvest back into your portfolio before December 31.
Think:
New windows or roofing
Energy-efficient upgrades
Landscaping or curb appeal projects
Not only do these add property value — they also qualify for depreciation, giving you future tax savings.
7. Balance Short-Term Flips vs. Long-Term Holds
If you’ve been flipping or BRRRRing in Indy, now’s the time to think strategically about how long you hold.
Flippers: Holding a project for 12+ months converts gains from short-term (taxed as ordinary income) to long-term (lower capital gains rate).
Buy-and-hold investors: Consider refinancing to pull tax-free equity you can reinvest elsewhere.
For help comparing models, read Fix-and-Flip vs Buy-and-Hold: Choosing Your Strategy in Indianapolis.
8. Don’t Forget Indiana-Specific Incentives
Indiana investors may qualify for a few overlooked benefits:
Homestead & Mortgage Deductions: If you converted a property to your primary home this year.
Historic Rehab Credit: For improving qualifying older homes (great in Irvington or Fountain Square).
Energy Efficiency Credits: For solar or energy-saving upgrades.
Local incentives can stack on top of federal deductions — a win-win if you’re upgrading responsibly.
9. Meet With Your CPA Before Year-End
The single most valuable move you can make before December 31? Sit down with your CPA.
A 30-minute meeting can help you:
✅ Identify last-minute deductions
✅ Adjust quarterly estimated payments
✅ Plan refinance timing or property sales
✅ Review your entity and depreciation strategy
Quick 2025 Indy Investment Snapshot
According to Redfin + MIBOR (Q3 2025):
Median investment property price: ~$270,000
Average rent growth: +3.2% YoY
Average cap rate: 6.9%
Vacancy rate: ~5.1%
Top investor neighborhoods: Garfield Park, Near Eastside, Bates-Hendricks, Speedway
Indy’s investor scene remains stable, with balanced cash flow, strong rent demand, and moderate appreciation — perfect conditions for long-term strategic plays.
Investor FAQs: Year-End Planning
Can I still claim depreciation on upgrades made late in the year?
Yes — as long as the property was placed in service before December 31, you can claim a proportional deduction for 2025.
Should I make repairs before or after New Year’s?
Before, if you want to write them off for this tax year. Paying the invoice by Dec 31 seals the deduction.
Do I need an LLC for tax advantages?
Not necessarily, but it simplifies accounting and can help with liability protection — especially if you own multiple properties.
How much time should I spend on tax prep?
Plan 1–2 hours per property to review income, receipts, and maintenance costs. It’ll save time (and money) come April.
Final Thoughts: Finish the Year Strong
Tax planning doesn’t have to be stressful — especially if you handle it before the calendar flips.
A few smart moves this quarter can lead to lower taxes, stronger cash flow, and cleaner books for 2026.
The Roots Realty Co. team works with Indianapolis investors year-round to help identify profitable neighborhoods, connect with CPAs and contractors, and manage long-term portfolio growth.
It’s that time of year again — not just for wrapping gifts, but for wrapping up your real estate books.
As 2025 winds down, smart Indianapolis investors are making their final tax moves to maximize deductions, defer capital gains, and set themselves up for a stronger 2026.
Whether you own one duplex or a dozen rentals, a few strategic decisions now can mean thousands saved come tax season.
Here’s your guide to the best year-end tax strategies for real estate investors in Indiana — plus a quick reminder that we’re not tax professionals (so always verify with your CPA before taking action).
⚠️ Disclaimer
Roots Realty Co. is not a tax, legal, or financial advisory firm. The information below is for educational purposes only. Always consult a qualified CPA or tax professional for personalized guidance on your situation.
1. Review Your Income and Expense Records
Start by tightening up your books before December 31.
Go through your income statements, repair receipts, and invoices to make sure you’re capturing every deductible expense.
Common deductions for Indy investors include:
Mortgage interest
Property taxes
Insurance premiums
Repairs and maintenance
Property management fees
Utilities for vacant units
Mileage and travel to properties
💡 Pro tip: Track every small cost — from paint brushes to parking — in your accounting software or spreadsheet. It all adds up at tax time.
2. Prepay and Accelerate Deductions
If you’ve got maintenance or service bills coming up, pay them before year-end to shift those deductions into 2025.
Examples:
Prepay January’s property management or insurance fees.
Schedule HVAC servicing or appliance replacements in December.
Stock up on repair supplies before the year closes.
This “bunching” strategy helps reduce taxable income now — a classic move for active landlords.
3. Take Advantage of Bonus Depreciation (While You Still Can)
2025 is the final year of generous bonus depreciation before it phases down again in 2026.
What that means for Indiana investors:
You can still accelerate depreciation on qualifying improvements (e.g., flooring, appliances, HVAC systems).
Starting in 2026, the rate drops to 40%, meaning less upfront tax benefit.
If you bought or rehabbed a property recently, ask your CPA about a cost segregation study — it can separate building components into faster-depreciating categories, improving your cash flow.
4. Reevaluate Your Ownership Structure
If your rentals are still held personally, it might be time to explore an LLC or S-corp setup.
Pros:
Pass-through taxation (no double tax)
Easier expense tracking
Liability protection
Cons:
Slightly higher admin costs
Financing can be trickier for multi-member LLCs
Every investor’s setup is different — your CPA can help you decide if 2026 is the right time to restructure.
5. Harvest Capital Losses
If you sold underperforming assets this year (real estate or stocks), use capital losses to offset gains.
Example:
You made $40,000 in gains on one sale but lost $15,000 on another — you’ll only pay tax on the $25,000 net gain.
You can also apply up to $3,000 in excess losses toward your ordinary income, with the remainder rolling forward to future years.
6. Reinvest Through Capital Improvements
One of the smartest ways to reduce taxable income is to reinvest back into your portfolio before December 31.
Think:
New windows or roofing
Energy-efficient upgrades
Landscaping or curb appeal projects
Not only do these add property value — they also qualify for depreciation, giving you future tax savings.
7. Balance Short-Term Flips vs. Long-Term Holds
If you’ve been flipping or BRRRRing in Indy, now’s the time to think strategically about how long you hold.
Flippers: Holding a project for 12+ months converts gains from short-term (taxed as ordinary income) to long-term (lower capital gains rate).
Buy-and-hold investors: Consider refinancing to pull tax-free equity you can reinvest elsewhere.
For help comparing models, read Fix-and-Flip vs Buy-and-Hold: Choosing Your Strategy in Indianapolis.
8. Don’t Forget Indiana-Specific Incentives
Indiana investors may qualify for a few overlooked benefits:
Homestead & Mortgage Deductions: If you converted a property to your primary home this year.
Historic Rehab Credit: For improving qualifying older homes (great in Irvington or Fountain Square).
Energy Efficiency Credits: For solar or energy-saving upgrades.
Local incentives can stack on top of federal deductions — a win-win if you’re upgrading responsibly.
9. Meet With Your CPA Before Year-End
The single most valuable move you can make before December 31? Sit down with your CPA.
A 30-minute meeting can help you:
✅ Identify last-minute deductions
✅ Adjust quarterly estimated payments
✅ Plan refinance timing or property sales
✅ Review your entity and depreciation strategy
Quick 2025 Indy Investment Snapshot
According to Redfin + MIBOR (Q3 2025):
Median investment property price: ~$270,000
Average rent growth: +3.2% YoY
Average cap rate: 6.9%
Vacancy rate: ~5.1%
Top investor neighborhoods: Garfield Park, Near Eastside, Bates-Hendricks, Speedway
Indy’s investor scene remains stable, with balanced cash flow, strong rent demand, and moderate appreciation — perfect conditions for long-term strategic plays.
Investor FAQs: Year-End Planning
Can I still claim depreciation on upgrades made late in the year?
Yes — as long as the property was placed in service before December 31, you can claim a proportional deduction for 2025.
Should I make repairs before or after New Year’s?
Before, if you want to write them off for this tax year. Paying the invoice by Dec 31 seals the deduction.
Do I need an LLC for tax advantages?
Not necessarily, but it simplifies accounting and can help with liability protection — especially if you own multiple properties.
How much time should I spend on tax prep?
Plan 1–2 hours per property to review income, receipts, and maintenance costs. It’ll save time (and money) come April.
Final Thoughts: Finish the Year Strong
Tax planning doesn’t have to be stressful — especially if you handle it before the calendar flips.
A few smart moves this quarter can lead to lower taxes, stronger cash flow, and cleaner books for 2026.
The Roots Realty Co. team works with Indianapolis investors year-round to help identify profitable neighborhoods, connect with CPAs and contractors, and manage long-term portfolio growth.
It’s that time of year again — not just for wrapping gifts, but for wrapping up your real estate books.
As 2025 winds down, smart Indianapolis investors are making their final tax moves to maximize deductions, defer capital gains, and set themselves up for a stronger 2026.
Whether you own one duplex or a dozen rentals, a few strategic decisions now can mean thousands saved come tax season.
Here’s your guide to the best year-end tax strategies for real estate investors in Indiana — plus a quick reminder that we’re not tax professionals (so always verify with your CPA before taking action).
⚠️ Disclaimer
Roots Realty Co. is not a tax, legal, or financial advisory firm. The information below is for educational purposes only. Always consult a qualified CPA or tax professional for personalized guidance on your situation.
1. Review Your Income and Expense Records
Start by tightening up your books before December 31.
Go through your income statements, repair receipts, and invoices to make sure you’re capturing every deductible expense.
Common deductions for Indy investors include:
Mortgage interest
Property taxes
Insurance premiums
Repairs and maintenance
Property management fees
Utilities for vacant units
Mileage and travel to properties
💡 Pro tip: Track every small cost — from paint brushes to parking — in your accounting software or spreadsheet. It all adds up at tax time.
2. Prepay and Accelerate Deductions
If you’ve got maintenance or service bills coming up, pay them before year-end to shift those deductions into 2025.
Examples:
Prepay January’s property management or insurance fees.
Schedule HVAC servicing or appliance replacements in December.
Stock up on repair supplies before the year closes.
This “bunching” strategy helps reduce taxable income now — a classic move for active landlords.
3. Take Advantage of Bonus Depreciation (While You Still Can)
2025 is the final year of generous bonus depreciation before it phases down again in 2026.
What that means for Indiana investors:
You can still accelerate depreciation on qualifying improvements (e.g., flooring, appliances, HVAC systems).
Starting in 2026, the rate drops to 40%, meaning less upfront tax benefit.
If you bought or rehabbed a property recently, ask your CPA about a cost segregation study — it can separate building components into faster-depreciating categories, improving your cash flow.
4. Reevaluate Your Ownership Structure
If your rentals are still held personally, it might be time to explore an LLC or S-corp setup.
Pros:
Pass-through taxation (no double tax)
Easier expense tracking
Liability protection
Cons:
Slightly higher admin costs
Financing can be trickier for multi-member LLCs
Every investor’s setup is different — your CPA can help you decide if 2026 is the right time to restructure.
5. Harvest Capital Losses
If you sold underperforming assets this year (real estate or stocks), use capital losses to offset gains.
Example:
You made $40,000 in gains on one sale but lost $15,000 on another — you’ll only pay tax on the $25,000 net gain.
You can also apply up to $3,000 in excess losses toward your ordinary income, with the remainder rolling forward to future years.
6. Reinvest Through Capital Improvements
One of the smartest ways to reduce taxable income is to reinvest back into your portfolio before December 31.
Think:
New windows or roofing
Energy-efficient upgrades
Landscaping or curb appeal projects
Not only do these add property value — they also qualify for depreciation, giving you future tax savings.
7. Balance Short-Term Flips vs. Long-Term Holds
If you’ve been flipping or BRRRRing in Indy, now’s the time to think strategically about how long you hold.
Flippers: Holding a project for 12+ months converts gains from short-term (taxed as ordinary income) to long-term (lower capital gains rate).
Buy-and-hold investors: Consider refinancing to pull tax-free equity you can reinvest elsewhere.
For help comparing models, read Fix-and-Flip vs Buy-and-Hold: Choosing Your Strategy in Indianapolis.
8. Don’t Forget Indiana-Specific Incentives
Indiana investors may qualify for a few overlooked benefits:
Homestead & Mortgage Deductions: If you converted a property to your primary home this year.
Historic Rehab Credit: For improving qualifying older homes (great in Irvington or Fountain Square).
Energy Efficiency Credits: For solar or energy-saving upgrades.
Local incentives can stack on top of federal deductions — a win-win if you’re upgrading responsibly.
9. Meet With Your CPA Before Year-End
The single most valuable move you can make before December 31? Sit down with your CPA.
A 30-minute meeting can help you:
✅ Identify last-minute deductions
✅ Adjust quarterly estimated payments
✅ Plan refinance timing or property sales
✅ Review your entity and depreciation strategy
Quick 2025 Indy Investment Snapshot
According to Redfin + MIBOR (Q3 2025):
Median investment property price: ~$270,000
Average rent growth: +3.2% YoY
Average cap rate: 6.9%
Vacancy rate: ~5.1%
Top investor neighborhoods: Garfield Park, Near Eastside, Bates-Hendricks, Speedway
Indy’s investor scene remains stable, with balanced cash flow, strong rent demand, and moderate appreciation — perfect conditions for long-term strategic plays.
Investor FAQs: Year-End Planning
Can I still claim depreciation on upgrades made late in the year?
Yes — as long as the property was placed in service before December 31, you can claim a proportional deduction for 2025.
Should I make repairs before or after New Year’s?
Before, if you want to write them off for this tax year. Paying the invoice by Dec 31 seals the deduction.
Do I need an LLC for tax advantages?
Not necessarily, but it simplifies accounting and can help with liability protection — especially if you own multiple properties.
How much time should I spend on tax prep?
Plan 1–2 hours per property to review income, receipts, and maintenance costs. It’ll save time (and money) come April.
Final Thoughts: Finish the Year Strong
Tax planning doesn’t have to be stressful — especially if you handle it before the calendar flips.
A few smart moves this quarter can lead to lower taxes, stronger cash flow, and cleaner books for 2026.
The Roots Realty Co. team works with Indianapolis investors year-round to help identify profitable neighborhoods, connect with CPAs and contractors, and manage long-term portfolio growth.
It’s that time of year again — not just for wrapping gifts, but for wrapping up your real estate books.
As 2025 winds down, smart Indianapolis investors are making their final tax moves to maximize deductions, defer capital gains, and set themselves up for a stronger 2026.
Whether you own one duplex or a dozen rentals, a few strategic decisions now can mean thousands saved come tax season.
Here’s your guide to the best year-end tax strategies for real estate investors in Indiana — plus a quick reminder that we’re not tax professionals (so always verify with your CPA before taking action).
⚠️ Disclaimer
Roots Realty Co. is not a tax, legal, or financial advisory firm. The information below is for educational purposes only. Always consult a qualified CPA or tax professional for personalized guidance on your situation.
1. Review Your Income and Expense Records
Start by tightening up your books before December 31.
Go through your income statements, repair receipts, and invoices to make sure you’re capturing every deductible expense.
Common deductions for Indy investors include:
Mortgage interest
Property taxes
Insurance premiums
Repairs and maintenance
Property management fees
Utilities for vacant units
Mileage and travel to properties
💡 Pro tip: Track every small cost — from paint brushes to parking — in your accounting software or spreadsheet. It all adds up at tax time.
2. Prepay and Accelerate Deductions
If you’ve got maintenance or service bills coming up, pay them before year-end to shift those deductions into 2025.
Examples:
Prepay January’s property management or insurance fees.
Schedule HVAC servicing or appliance replacements in December.
Stock up on repair supplies before the year closes.
This “bunching” strategy helps reduce taxable income now — a classic move for active landlords.
3. Take Advantage of Bonus Depreciation (While You Still Can)
2025 is the final year of generous bonus depreciation before it phases down again in 2026.
What that means for Indiana investors:
You can still accelerate depreciation on qualifying improvements (e.g., flooring, appliances, HVAC systems).
Starting in 2026, the rate drops to 40%, meaning less upfront tax benefit.
If you bought or rehabbed a property recently, ask your CPA about a cost segregation study — it can separate building components into faster-depreciating categories, improving your cash flow.
4. Reevaluate Your Ownership Structure
If your rentals are still held personally, it might be time to explore an LLC or S-corp setup.
Pros:
Pass-through taxation (no double tax)
Easier expense tracking
Liability protection
Cons:
Slightly higher admin costs
Financing can be trickier for multi-member LLCs
Every investor’s setup is different — your CPA can help you decide if 2026 is the right time to restructure.
5. Harvest Capital Losses
If you sold underperforming assets this year (real estate or stocks), use capital losses to offset gains.
Example:
You made $40,000 in gains on one sale but lost $15,000 on another — you’ll only pay tax on the $25,000 net gain.
You can also apply up to $3,000 in excess losses toward your ordinary income, with the remainder rolling forward to future years.
6. Reinvest Through Capital Improvements
One of the smartest ways to reduce taxable income is to reinvest back into your portfolio before December 31.
Think:
New windows or roofing
Energy-efficient upgrades
Landscaping or curb appeal projects
Not only do these add property value — they also qualify for depreciation, giving you future tax savings.
7. Balance Short-Term Flips vs. Long-Term Holds
If you’ve been flipping or BRRRRing in Indy, now’s the time to think strategically about how long you hold.
Flippers: Holding a project for 12+ months converts gains from short-term (taxed as ordinary income) to long-term (lower capital gains rate).
Buy-and-hold investors: Consider refinancing to pull tax-free equity you can reinvest elsewhere.
For help comparing models, read Fix-and-Flip vs Buy-and-Hold: Choosing Your Strategy in Indianapolis.
8. Don’t Forget Indiana-Specific Incentives
Indiana investors may qualify for a few overlooked benefits:
Homestead & Mortgage Deductions: If you converted a property to your primary home this year.
Historic Rehab Credit: For improving qualifying older homes (great in Irvington or Fountain Square).
Energy Efficiency Credits: For solar or energy-saving upgrades.
Local incentives can stack on top of federal deductions — a win-win if you’re upgrading responsibly.
9. Meet With Your CPA Before Year-End
The single most valuable move you can make before December 31? Sit down with your CPA.
A 30-minute meeting can help you:
✅ Identify last-minute deductions
✅ Adjust quarterly estimated payments
✅ Plan refinance timing or property sales
✅ Review your entity and depreciation strategy
Quick 2025 Indy Investment Snapshot
According to Redfin + MIBOR (Q3 2025):
Median investment property price: ~$270,000
Average rent growth: +3.2% YoY
Average cap rate: 6.9%
Vacancy rate: ~5.1%
Top investor neighborhoods: Garfield Park, Near Eastside, Bates-Hendricks, Speedway
Indy’s investor scene remains stable, with balanced cash flow, strong rent demand, and moderate appreciation — perfect conditions for long-term strategic plays.
Investor FAQs: Year-End Planning
Can I still claim depreciation on upgrades made late in the year?
Yes — as long as the property was placed in service before December 31, you can claim a proportional deduction for 2025.
Should I make repairs before or after New Year’s?
Before, if you want to write them off for this tax year. Paying the invoice by Dec 31 seals the deduction.
Do I need an LLC for tax advantages?
Not necessarily, but it simplifies accounting and can help with liability protection — especially if you own multiple properties.
How much time should I spend on tax prep?
Plan 1–2 hours per property to review income, receipts, and maintenance costs. It’ll save time (and money) come April.
Final Thoughts: Finish the Year Strong
Tax planning doesn’t have to be stressful — especially if you handle it before the calendar flips.
A few smart moves this quarter can lead to lower taxes, stronger cash flow, and cleaner books for 2026.
The Roots Realty Co. team works with Indianapolis investors year-round to help identify profitable neighborhoods, connect with CPAs and contractors, and manage long-term portfolio growth.