Biloxi Real Estate Tax Planning Strategies for 2026: Maximize Your Property Investment Returns
2026 ushers in important changes for Biloxi property owners. Proactive tax planning can unlock thousands in property investment savings. Below, discover expert-guided strategies and actionable steps tailored for investors seeking optimal real estate tax outcomes in Biloxi, Mississippi.
Table of Contents
- What is New with Bonus Depreciation for Biloxi Real Estate in 2026?
- How Does Cost Segregation Accelerate Deductions?
- What Does the 2026 SALT Cap Mean for My Property Taxes?
- What Deductions Apply to Biloxi Rental Properties?
- Optimizing for Capital Gains and 1031 Exchanges in 2026
- Action Steps for Smart Biloxi Real Estate Tax Planning
- Frequently Asked Questions
- Further Reading & Resources
What is New with Bonus Depreciation for Biloxi Real Estate in 2026?
Property owners in Biloxi benefit from recently enacted legislation that reinstates 100% bonus depreciation. This powerful deduction applies to new and used qualified property, including appliances, HVAC, and leasehold improvements. Unlike Section 179, there is no annual limit or income restriction.
Which Biloxi Property Investments Qualify for Bonus Depreciation?
- Residential rental property improvements
- Renovated building components (roofs, lighting, security systems)
- New building fixtures, appliances, and major equipment purchases
See IRS Notice 2026-11 for full eligibility rules.
How Does Cost Segregation Accelerate Deductions?
Cost segregation is a specialized engineering-based study that identifies components of your Biloxi rental or investment property that can be depreciated over 5, 7, or 15 years instead of 27.5 or 39 years. This means faster deductions and earlier cash savings.
| Component | Regular Depreciation Period | Cost Segregation Period |
|---|---|---|
| Carpeting, Appliances | 27.5 years | 5 years |
| Landscaping | 27.5 years | 15 years |
Pro Tip: Combine cost segregation with 100% bonus depreciation for significant first-year write-offs.
Uncle Kam’s tax strategy specialists can coordinate a cost segregation study for your Biloxi properties.
What Does the 2026 SALT Cap Mean for My Property Taxes?
You can now deduct more of your Mississippi property taxes on your federal return, up to the $40,400 limit. If your income exceeds $606,000 (single/joint), the deductible amount shrinks back to $10,000.
SALT Cap Phase-Out in Biloxi (2026):
- MAGI ≤ $505,000: Full $40,400 SALT deduction
- MAGI $505,000–$606,000: Phase-out applies
- MAGI ≥ $606,000: $10,000 limit
This is critical for Biloxi landlords with multiple properties and significant property tax bills.
What Deductions Apply to Biloxi Rental Properties?
Maximize your tax benefits by deducting every eligible expense. Here’s a summary of common deductions for Biloxi real estate:
| Deduction Category | Description |
|---|---|
| Depreciation | Buildings over 27.5 yrs, eligible improvements at 100% in year placed in service |
| Mortgage Interest | Interest on loans secured by rental property |
| Property Taxes | Deductible up to SALT cap |
| Insurance | Property & landlord insurance |
| Maintenance & Repairs | Repairs, supplies, landscaping |
| Professional Fees | Accounting, tax preparation, legal fees |
| HOA Fees | Association dues |
| Utilities | If paid by landlord |
Download IRS Publication 527 for a detailed deduction checklist or see Uncle Kam’s real estate deduction guide.
Optimizing for Capital Gains and 1031 Exchanges in 2026
In 2026, long-term capital gains remain at 0%, 15%, or 20% based on your income, with a 3.8% net investment income tax for high earners. Planning the timing and mechanics of property sales is key to minimizing your tax bill.
1031 Exchange Example
- Sell Biloxi rental at a gain
- Identify new property within 45 days, close in 180
- Defer all capital gain tax, reinvest in like-kind Mississippi property
Learn about 1031 exchange and investment planning.
Action Steps for Smart Biloxi Real Estate Tax Planning
- Track and document all improvements after Jan 19, 2025 for bonus depreciation
- Aggregate all rental income & deductible expenses using accurate records
- Monitor property tax bills and SALT cap implications
- Consult with an expert on cost segregation, large upgrades, and 1031 rollovers
- Schedule a personalized Biloxi tax consultation
Frequently Asked Questions
Can I claim depreciation on the land?
No. Depreciation applies only to buildings and qualifying improvements, not land value. It’s vital to allocate the purchase price correctly between land and structure. See IRS Pub 527 for guidance.
What happens if my rental property shows a loss?
Losses may offset other passive income or, subject to the $25,000 rule, active income (phase-out begins at $100,000 MAGI). Unused losses carry forward. More details: Real Estate Investor Tax Planning.
Is it better to own rentals in an LLC or my name?
There are legal and tax implications. An LLC can provide limited liability, but does not change how rental profit is taxed unless you elect S-Corp status. Consult a Mississippi tax planner.
What records should I keep for my Biloxi rentals?
Maintain lease agreements, closing docs, invoices, depreciation schedules, property tax bills, and improvement receipts for at least 7 years (audit period). See IRS recordkeeping rules.
Do I owe taxes when selling depreciated rental property?
Yes, depreciation claimed is recaptured at 25% when you sell. Plan sales and exchanges—with expert help—to minimize this. See our client tax planning results for examples.
Further Reading & Resources
- Real Estate Investor Tax Planning Services
- 2026 Tax Strategy Guide
- Entity Structuring for Mississippi Investors
- Biloxi Tax Preparation and Filing Services
- IRS Pub 527: Residential Rental Property
- IRS Notice 2026-11: Bonus Depreciation
Updated January 2026
