Yes, 100% bonus depreciation has been reinstated and made permanent through the "One, Big, Beautiful Bill (OBBB) Act" signed by President Trump, officially taking effect for qualified property acquired and placed in service after January 19, 2025. This legislation effectively reverses the scheduled phase-out of the Tax Cuts and Jobs Act (TCJA) bonus depreciation.
On July 4, 2025, President Trump signed the 2025 tax reform into law as P.L. 119-21, Republicans' “One Big Beautiful Bill.” Among its most impactful provisions is the permanent restoration of 100% bonus depreciation, offering long-term clarity for tax planning and capital investment strategies.
Yes, 100% bonus depreciation is back for eligible property acquired and placed in service after January 19, 2025, thanks to the "One, Big, Beautiful Bill" (OBBB) Act, which permanently reinstated it, reversing the phase-out schedule that would have reduced it to 40% for 2025 under prior law. This allows businesses to deduct the full cost of new equipment, machinery, and other qualified assets in the first year, significantly impacting tax planning.
One Big Beautiful Bill Act
In 2025, the OBBB reinstated 100% bonus depreciation. Starting with property placed in service after Jan. 19, 2025, businesses can again deduct 100% of the cost of most qualifying property up front moving forward.
WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued Notice 2026-11 PDF that provides taxpayers with guidance on the permanent 100% additional first year depreciation deduction for eligible depreciable property acquired after Jan. 19, 2025, provided by the One, Big, Beautiful Bill.
100% bonus depreciation, when placed in service between 9/28/2017 and 12/31/2022. 80%, when placed in service between 1/1/2023 and 12/31/2023. 60%, when placed in service between 1/1/2024 and 12/31/2024. 40%, when placed in service between 1/1/2025 and 12/31/2025.
Yes, in 2024, each parent could gift $18,000 to a child (totaling $36,000 per child for the couple) without tax implications, and for 2025, that amount increased to $19,000 per parent ($38,000 per child) because the annual gift tax exclusion is adjusted for inflation, requiring separate checks for each parent to utilize the full amount, according to TurboTax, Yahoo Finance, Guardian Life, IRS (.gov), and Mercer Advisors.
Yes, 100% bonus depreciation is back for eligible property acquired and placed in service after January 19, 2025, thanks to the "One, Big, Beautiful Bill" (OBBB) Act, which permanently reinstated it, reversing the phase-out schedule that would have reduced it to 40% for 2025 under prior law. This allows businesses to deduct the full cost of new equipment, machinery, and other qualified assets in the first year, significantly impacting tax planning.
Both new and used property can qualify if the asset is new to you and used in your business during that tax year. Let's say your business buys $1 million worth of equipment. With 100 percent bonus depreciation, you can deduct the full amount in year one.
The double declining balance method of depreciation, also known as the 200% declining balance method of depreciation, is a form of accelerated depreciation. This means that compared to the straight-line method, the depreciation expense will be faster in the early years of the asset's life but slower in the later years.
If the individual tax cuts expire, taxpayers in all income groups would face higher and more complicated taxes. Machinery and equipment expensing is a key provision that, if allowed to expire, would especially harm capital-intensive industries like manufacturing.
Bonus depreciation is back. Business owners got their wish in 2025 when Congress made 100% bonus depreciation permanent. The provision, which was initially part of the 2017 Tax Cuts and Jobs Act (TCJA), began to phase out in 2023.
President-elect Donald Trump campaigned on lowering the US corporate income tax rate to 15 percent. He made the same request in 2017 when Republicans passed their tax cuts, but Congress only cut the federal rate to 21 percent—down from the worldwide high of 35 percent.
The main downsides of bonus depreciation include losing future deductions by taking them upfront, potentially increasing future taxable income, facing higher "recapture" taxes if the asset is sold, and dealing with complex rules or state-level nonconformity, making it less beneficial for short-term investors or those in lower tax brackets who might need deductions later. It also creates large upfront tax benefits that might not align with book income, affecting financing, and rules change frequently, requiring constant tax planning.
Property owners and investors should pay attention here. The OBBB — which was the Trump administration's signature tax and domestic policy bill — officially reinstated 100% bonus depreciation for property acquired after January 19, 2025, and placed in service after that same date.
If the vehicle weighs more than 6,000 pounds and is used more than 50% for business, you can write off up to $28,900 in the first year, and potentially even more with bonus depreciation. Let's break it down: Buy a qualifying vehicle for $60,000, and you could write off a large portion of that cost in year one.
Example: Calculating car depreciation
You started using your car for business on January 1, 2022. The car costs you $30,000, and you use it for business 60% of the time. This means the part of the car's cost you can depreciate is: $30,000 × 60% = $18,000.
Vehicles qualifying for 100% bonus depreciation are primarily heavy-duty trucks, large vans, and SUVs with a Gross Vehicle Weight Rating (GVWR) over 6,000 pounds that are used more than 50% for business, with the full 100% deduction applying to assets placed in service after January 19, 2025, under the OBBB Act, allowing for immediate expensing of the entire cost, unlike luxury cars capped by IRS rules.
The rules allowed bonus depreciation to 100% for all qualified purchases made between September 27, 2017, and January 1, 2023. Bonus depreciation ramped down to 80% in 2023 and 60% for 2024. The OBBBA reinstated 100% bonus deprecation for 2025 and beyond.
At a glance:
Any gifts exceeding $19,000 in a year must be reported and contribute to your lifetime exclusion amount. You can gift up to $13.99 million over your lifetime without paying a gift tax on it (as of 2025).
Step-Up in Basis for Inherited Assets
One tax advantage of leaving assets after death is the step-up in basis. This provision allows heirs to inherit assets at their fair market value at the time of death, effectively resetting the capital gains tax to zero for any appreciation during the decedent's lifetime.