At Legacy Built, we invest in self-storage because it blends steady demand with smart real estate planning. For many partners, a key topic is depreciation. If you are evaluating storage unit investing in Tucson Arizona and nearby areas like Oro Valley, Marana, Sahuarita, Phoenix, and Scottsdale, it helps to know how Arizona state rules can change the timing of those benefits.
Why depreciation matters in self-storage investing
Depreciation lets an owner recover certain property costs over time. A self-storage facility may include buildings, site improvements, and equipment. With proper documentation, some components can fall into shorter recovery periods than the main structure. That can increase deductions earlier in a project’s life and influence investor planning.
Federal depreciation rules are the starting point
Most calculations begin with federal law. Federal rules set recovery periods, methods, and first-year expensing options, including bonus depreciation on qualifying property. In simple terms, federal depreciation can front-load deductions in some years, especially when a project has meaningful personal property components.
Arizona conformity and state-level adjustments
Arizona generally starts with a federal income base, then applies state additions and subtractions. One important detail is that Arizona has required adjustments that can reduce or delay the impact of federal bonus depreciation on an Arizona return. This can lead to two schedules: one for federal reporting and another for Arizona-only depreciation tracking.
What the timing difference can look like
When Arizona does not allow the same first-year amount, the state can require an addback of federal depreciation and then allow different depreciation deductions in later years. The overall depreciation benefit may still exist, but the timing can be spread out for Arizona taxable income.
Investor implications for Tucson and the region
Many Legacy Built projects use pass-through structures, so tax items can flow through to investors. If you file an Arizona return, you may see Arizona modifications that do not match federal numbers line for line. If you live outside Arizona, you might still have Arizona-source reporting depending on your structure.
We aim to keep investing transparent. Our results are summarized in our historical performance, and our approach is explained in our story. Investors focused on Tucson can also read our thoughts on market momentum in our Tucson self-storage outlook.
How we help investors think about taxes responsibly
We do not give personal tax advice, but we do help investors understand the right questions to bring to their CPA. Depreciation outcomes depend on placed-in-service dates, asset classifications, and elections made at the federal level. Arizona adjustments depend on those details too. We also keep financing language general. We offer financing for all customers, and we focus on the fundamentals of the investment first.
If you want to dig deeper, our FAQs cover common topics, and you can connect directly with the Legacy Built team.