Bonus Depreciation Timeline Tool: What Rate Applies to Your Property?
The One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) restored 100% bonus depreciation permanently for qualified property acquired and placed in service after January 19, 2025. Property acquired before that date stays under the legacy phase-down.
Bonus Depreciation Timeline Tool
Public Law 119-21 (OBBBA) plus IRS Notice 2026-11. The January 19, 2025 acquisition-date cliff determines whether you get permanent 100% or the legacy phase-down.
Effective acquisition date is after January 19, 2025, so 100% permanent bonus applies under OBBBA Section 168(k). You may elect 40% if the loss would otherwise be wasted.
The Jan 19, 2025 cliff
OBBBA permanently reset bonus depreciation to 100% for property whose binding acquisition contract is signed after January 19, 2025. Property under a binding contract entered before that date remains subject to the phase-down: 40% in 2025, 20% in 2026, and 0% thereafter. IRS Notice 2026-11 provides interim guidance.
The 40% election
For the first tax year ending after January 19, 2025, taxpayers may elect 40% bonus depreciation (60% for long-production-period property). The election is useful when an otherwise-100% deduction would waste a net operating loss.
Zawwad Ul Sami, Founder
Zawwad Ul Sami is the founder of WeCostSeg, a founder-led cost segregation firm serving real estate investors across the US. He focuses on strategy, pricing, and the firm's overall direction.