A client calls with a question: “I just bought a warehouse and spent $250,000 improving it. Can I deduct all of that this year?”
If the improvements were placed in service after Jan. 19, 2025 — and if the binding acquisition contract was signed after that same date — the answer might be yes, thanks to the permanent reinstatement of 100% bonus depreciation under the One Big Beautiful Bill Act.
This article breaks down what changed and how CPAs can help clients take full advantage. Whether your clients are investing in commercial buildings, launching new ventures or improving existing properties, this update creates fresh opportunities for accelerated deductions.
New rules to understand
Before OBBBA, bonus depreciation was set to phase down:
- 60% in 2024
- 40% in 2025
- 20% in 2026
- 0% in 2027
OBBBA scrapped that phase-down and permanently restored 100% bonus depreciation for qualified property placed in service after Jan. 19, 2025, so long as the binding contract to acquire the property was signed on or after that same date.
That timing distinction is essential. The tax treatment for otherwise identical properties could vary dramatically based on both the placed-in-service date and the date the acquisition contract was executed.
How placement and contract dates affect eligibility
Let’s take an example: Your client buys a $2 million warehouse and spends $250,000 on lighting, electrical and flooring upgrades.
- If placed in service on Jan. 15, 2025 (with a contract signed before Jan 19), they only qualify for 40% bonus depreciation.
- If placed in service on Jan. 22, 2025 (with a contract signed after Jan 19), they qualify for 100% bonus.
That shift could mean the difference between writing off $100,000 or the full $250,000 in year one.
Bonus depreciation applies to five-, seven- and 15-year assets — components typically identified in a cost segregation study. For clients making major capital investments, clarifying these dates early is critical.
Assets that qualify
100% bonus depreciation remains available for property with a MACRS recovery period of 20 years or less, including:
- Furniture, fixtures, and equipment;
- Interior finishes and flooring;
- Qualified Improvement Property;
- Exterior improvements like landscaping, paving or site lighting.
Used property still counts, as long as the taxpayer didn’t previously use it themselves.
For new acquisitions or improvement projects, proactively identifying these assets allows for smoother coordination with your tax and engineering teams.
Key opportunities for CPAs
If you work with real estate investors, professional service firms or business owners, here’s how this new framework affects your advisory role:
- Model depreciation scenarios to inform estimated payments and cash flow.
- Evaluate placed-in-service dates alongside contract signing dates.
- Coordinate any needed Form 3115 filings for method changes if prior assets were misclassified.
- Engage cost segregation experts early to have studies ready before filing deadlines.
Because 100% bonus depreciation is now a permanent feature of the Tax Code under OBBBA, the urgency to beat a phase-out is gone, but strategic timing still matters, especially around contract dates and placed-in-service triggers.
Bringing it all together for your clients
100% bonus depreciation is now permanently restored. This changes how clients should plan for 2025 and beyond.
It’s not about chasing deductions just for the sake of it, it’s about applying the Tax Code strategically so your clients capture these benefits compliantly and thoughtfully.
Whether you’re advising a real estate syndicator, a growing professional services firm or a business owner expanding operations, now is the time to review placed-in-service rules, contract timelines, asset classifications and overall depreciation strategy.
To run quick estimates on potential savings, you can use a
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