Businesses looking to purchase certain property (e.g., equipment, machinery, vehicles, furniture) to use in their business now have a few extra incentives for doing so. Under recently enacted provisions in the “One Big Beautiful Bill Act” (the “OBBBA”), the following tax incentives are now available:
- Permanent reinstatement of 100% bonus depreciation for “qualified property” placed in service after Jan. 19, 2025.
- Increase in the maximum amount of Section 179 property that a taxpayer can expense to $2.5 million, reduced by the amount by which the cost of qualifying property exceeds $4 million.
- New option to elect 40% bonus depreciation (60% for long production period property and qualified aircraft).
- New election available for 100% bonus depreciation for “qualified production property” placed in service before Jan. 1, 2031, with an extension possible due to acts of God. Defines “qualified production property” to include any portion of nonresidential real property used as an integral part of qualified manufacturing, agricultural, or chemical production, or refining of a “qualified product” that results in a substantial transformation of the product.
Particularized requirements must be met to qualify for any of these deductions.
