C Stores Tax Advantages in 2025
C-Store and convenience store DST tax advantages for 2025: Learn why gas station and convenience store properties offer unique depreciation benefits for 1031 exchange investors.
Key Takeaways
Convenience Store DST Tax Advantages for 2025. Discover why convenience stores are emerging as some of the most tax-advantaged real estate investments for 1031 exchange investors. Gas stations and c-stores qualify as 15-year property under the tax code, making them eligible for accelerated depreciation. With 100% bonus depreciation now permanent under the One Big Beautiful Bill Act, a $10 million c-store investment could provide a $10 million depreciation deduction in year one. Learn why major brands like 7-Eleven, Wawa, and Circle K are becoming attractive targets for tax-conscious investors.
Key Points Covered:
- 115-Year Accelerated Depreciation: Convenience stores and gas stations qualify as 15-year property under the tax code, allowing dramatically faster depreciation compared to the standard 39-year schedule for typical commercial real estate.
- 2100% Bonus Depreciation Now Permanent: The One Big Beautiful Bill Act made 100% bonus depreciation permanent for qualifying properties—meaning the ENTIRE building (not just equipment) can be depreciated in year one for c-stores.
- 3Massive Year-One Tax Deductions: A $10 million convenience store investment could provide up to $10 million in depreciation deductions in year one—potentially offsetting significant taxable income from other sources.
- 4Investment-Grade Credit Tenants: Major convenience store brands like 7-Eleven, Wawa, Sheetz, Circle K, and Qwik Trip typically offer investment-grade credit ratings and long-term NNN leases, combining tax benefits with tenant quality.
- 5Best for High-Income Investors: C-store tax benefits are most valuable for investors with significant taxable income to offset—talk to your CPA about how bonus depreciation fits into your overall tax strategy before investing solely for tax benefits.
Topics Covered
Frequently Asked Questions
Why do convenience stores qualify for faster depreciation?
What's the catch with c-store tax benefits?
Will 100% bonus depreciation last forever?
Related Resources
Bonus Depreciation 2025 Real Estate Guide
Complete guide to bonus depreciation rules for real estate investors
1031 Exchange Asset Classes Guide
Compare c-stores to other property types for 1031 exchanges
Tax Implications of Selling Investment Property
Understand capital gains and depreciation recapture
First-Time NNN Buyer's Guide
C-stores are typically triple-net leases—understand the structure
Full Transcript
Hello and welcome to Exchange Insights. Today we're talking about convenience stores and tax advantages in 2025.
So, why are convenience stores emerging as some of the most tax-advantaged real estate investments? It comes down to bonus depreciation and the recent changes in the tax code.
With the One Big Beautiful Bill Act, 100% bonus depreciation has been made permanent. This is huge for real estate investors. But here's what makes convenience stores unique.
Most commercial real estate is depreciated over 39 years. That's a long time to recoup your investment through depreciation deductions. But convenience stores qualify as 15-year property under the tax code. This classification applies to gas stations and c-stores, and it means the entire building, not just the equipment or improvements, is eligible for accelerated depreciation.
So, let's put this into perspective. If you invest in a $10 million convenience store property, you could potentially take a $10 million depreciation deduction in year one, rather than spreading it out over 39 years. That's a significant tax benefit that can shelter other income.
This is one of the reasons why brands like 7-Eleven, Wawa, Sheetz, Circle K, and Qwik Trip are becoming attractive investment targets. These are credit tenants with long-term leases, and the properties come with meaningful tax advantages.
Now, a few caveats.
First, bonus depreciation benefits are most valuable to investors with significant taxable income to offset. Talk to your CPA about how this fits into your overall tax strategy.
Second, the tax code can change. While bonus depreciation is currently permanent, future legislation could modify these rules.
Third, not all convenience stores are created equal. Location, tenant quality, lease terms, and property condition all matter. Don't invest solely for the tax benefits.
At Anchor1031, we're seeing increased interest in c-store investments from our 1031 exchange clients. If you're exploring tax-advantaged real estate strategies, convenience stores should be on your radar.
Thanks for watching. Visit anchor1031.com to learn more.
Ready to Start Your 1031 Exchange?
Schedule a call with our team to discuss your 1031 exchange.
Book My CallDisclosure
Tax Complexity and Investment Risk
Tax laws and regulations, including but not limited to Internal Revenue Code Section 1031, bonus depreciation rules, cost segregation studies, and other tax strategies, contain complex concepts that may vary depending on individual circumstances. Tax consequences related to real estate investments, depreciation benefits, and other tax strategies discussed herein may vary significantly based on each investor's specific situation and current tax legislation. Anchor1031, LLC and Great Point Capital, LLC make no representation or warranty of any kind with respect to the tax consequences of your investment or that the IRS will not challenge any such treatment. You should consult with and rely on your own tax advisor about all tax aspects with respect to your particular circumstances. Please note that Anchor1031 and Great Point Capital, LLC do not provide tax advice.
The information contained in this article is for general educational purposes only and does not constitute legal, tax, investment, or financial advice. This content is not a recommendation or offer to buy or sell securities. The content is provided as general information and should not be relied upon as a substitute for professional consultation with qualified legal, tax, or financial advisors.
Tax laws, regulations, and IRS guidance regarding 1031 exchanges are complex and subject to change. Information herein may include forward-looking statements, hypothetical information, calculations, or financial estimates that are inherently uncertain. Past performance is never indicative of future performance. The information presented may not reflect the most current legal developments, regulatory changes, or interpretations. Individual circumstances vary significantly, and strategies that may be appropriate for one investor may not be suitable for another.
All real estate investments, including 1031 exchanges, are speculative and involve substantial risk. There can be no assurance that any investor will not suffer significant losses, and a loss of part or all of the principal value may occur. Before making any investment decisions or implementing any 1031 exchange strategies, readers should consult with their own qualified legal, tax, and financial professionals who can provide advice tailored to their specific circumstances. Prospective investors should not proceed unless they can readily bear the consequences of potential losses.
While the author is a partner at Anchor1031, the views expressed are educational in nature and do not guarantee any particular outcome or create any obligations on behalf of the firm or author. Neither Anchor1031 nor the author assumes any liability for actions taken based on the information provided herein.
Explore DST Investments
Use our 1031 Exchange Portfolio Builder to browse DST properties, model your replacement property strategy, and see potential Year 1 yield calculations and diversification analysis.
- Browse curated DST marketplace
- Calculate potential Year 1 yield
- Diversify across asset classes and sponsors
