What is Bonus depreciation?
In short
Bonus depreciation is an additional first-year deduction for qualified property. The One Big Beautiful Bill Act permanently restored 100% bonus depreciation for property acquired after January 19, 2025.
Key takeaways
- Unlike Section 179, it has no dollar limit and can create a net operating loss.
- It applies automatically unless the taxpayer elects out, by class of property.
- Order: Section 179 first, then bonus depreciation, then regular depreciation on any remaining basis.
Where it's tested
REG: Property Transactions: Basis & Cost Recovery — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Under the One Big Beautiful Bill Act, which statement about bonus depreciation is correct for qualifying property acquired after January 19, 2025?