OBBBA Made 100% Bonus Depreciation Permanent — Here’s What Changed, and for Whom
One of the more consequential provisions in the One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, restored 100% bonus depreciation — permanently — for qualifying property. Here’s what actually changed, and for whom it matters.
The IRS confirmed in Notice 2026-11 that qualifying property — generally tangible property with a MACRS recovery period of 20 years or less, along with certain other categories — is eligible for the permanent 100% rate when it is both acquired and placed in service after January 19, 2025. Property acquired or placed in service between January 1 and January 19, 2025 falls under the prior phase-down rules rather than the new permanent rate, a narrow but important carve-out.
That prior phase-down came from the 2017 Tax Cuts and Jobs Act, which had scheduled bonus depreciation to step down year by year toward zero. As BDO’s tax practice notes in its OBBBA analysis, this reverses a scheduled decline that would have taken the bonus rate to 40% in 2025, 20% in 2026, and 0% by 2027 under prior law — a full phase-out OBBBA now eliminates for qualifying property.
It’s worth being precise about what this does and doesn’t do. Bonus depreciation changes the timing of a deduction, not the total amount depreciated over a property’s useful life — a distinction the IRS guidance itself is careful to preserve. A property owner who qualifies isn’t depreciating more overall; they’re able to take more of that depreciation sooner.
That timing benefit also isn’t automatic for every investor in every structure. Because depreciation benefits in a fund structure flow through to each investor’s allocable share, the practical impact for any individual depends on the fund’s own tax elections, that investor’s basis in the investment, and their passive-activity-loss position — factors that vary from investor to investor and year to year. This is not a guarantee that every investor in every fund receives an equivalent deduction; it’s a mechanism whose real-world effect depends on individual circumstances, which is exactly the kind of question worth raising with a personal tax advisor.
Longview Commercial does not provide tax, financial, or legal advice. This article is for general informational purposes only. Please consult your own qualified tax, financial, or legal advisor before making any investment decision.
“Bonus depreciation changes the timing of a deduction, not the total amount depreciated over a property’s useful life”