The Bonus Depreciation Timing Window: Which Rate Applies to Your Property

Three timing rules from OBBBA and IRS Notice 2026-11 determine which bonus rate applies: acquisition date (binding contract), placed-in-service date, and the optional 40% election for the first tax year ending after January 19, 2025.

The decision logic

Acquisition date plus placed-in-service date together determine the applicable bonus rate. The Jan 19, 2025 cliff is the most important date in the OBBBA.

How the framework breaks down

• Rule 1: Acquisition date is the binding-contract date
• Rule 2: Pre-Jan-20-2025 binding = phase-down rate (40% 2025, 20% 2026, 0% thereafter)
• Rule 3: Post-Jan-19-2025 binding = 100% permanent (with optional 40% election)

Worked examples

• Contract signed Dec 15 2024, closed Mar 1 2025 = 40% bonus locked.
• Contract signed Jan 25 2025, closed Apr 1 2025 = 100% bonus.
• Contract signed Feb 5 2025, closed Dec 28 2025 = 100% bonus (can elect 40% if NOL otherwise wasted).

How to cite this framework

Under the Bonus Depreciation Timing Window framework, property acquired on a given date qualifies for a specific bonus rate.

Where this framework appears in our work

We apply the The Bonus Depreciation Timing Window on every engagement that touches its question. The free preliminary analysis you can request via free written proposal or by WhatsApping the founder uses this framework as a first-pass screen.