Bonus Depreciation

The final draft tax legislation modifies the existing bonus depreciation rules which, as of today, only allow businesses a 40% depreciation deduction in the first year that qualifying assets are acquired. Under the “one big beautiful bill,” or OBBB, bonus depreciation in year-one is again increased to 100%--and made permanent for qualified property that is acquired and placed into service on or after January 19, 2025. Yet another elective 100% depreciation deduction is allowed for certain “qualified production property,” or (QPP). This elective additional deduction is temporary and allowed only through 2030. “QPP” is defined to include newly constructed (and some existing) non-residential real estate that is used for manufacturing, production, or refining of defined tangible personal property within in the U.S.

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about the Trump tax legislation making 100% bonus depreciation permanent.

Below is a summary of the debate that ensued between the two professors.