Overview

The 2026-2027 "harvest losses" strategy relies on 100% bonus depreciation via cost segregation — but IRC §168(g) mandates the Alternative Depreciation System (30-year straight-line, zero bonus depreciation) for real property located outside the U.S. That covers every market here except Puerto Rico and the US Virgin Islands, whose federal tax treatment is favorable but still needs advisor confirmation for §168(g) purposes. The material-participation / short-term-rental loophole (bypassing passive-activity-loss limits via material participation with average stays ≤7 days) still works abroad — it just produces a much smaller first-year tax shield than a comparable U.S. deal, since there's no bonus depreciation to accelerate. Every Tax score below already reflects this gentler foreign-property scale, not the aggressive bonus-eligible one. See full methodology & sources →