The Tax Cuts and Jobs Act of 2017 (TCJA) had a tremendous impact on commercial real estate, including liberalizing the depreciation provisions. Bonus depreciation was expanded and increased from 50 to 100 percent for qualifying assets placed in service beginning after September 27, 2017, through December 31, 2022. After December 31, 2022, the deduction percentage for bonus depreciation began decreasing by 20 percent per year and would have been fully phased out after 2026. Thanks to the One Big Beautiful Bill Act (OBBBA) passed in 2025, 100% bonus depreciation is now available on new and used assets. Because of changes in the OBBBA, which has restored 100% bonus depreciation. increased the depreciation that can be taken under Section 179 and added a new, important depreciation topic — qualified production property, this topic is vital for tax practitioners advising business taxpayers.
Learning Objectives
- Prepare for changes in the depreciation rules relating to bonus depreciation and Section 179
- Understand the Ins and out of depreciating qualified production property
Major Topics
- The OBBBA changes impacting bonus depreciation
- New Section 179 ceiling limitations
- When business property is subject to 100% bonus
- Qualified production property
- What is a qualified production activity?
- Recapture of depreciation on qualified production property
