100% Bonus Depreciation: What to Know Now
What changed: For qualifying assets acquired and placed in service after Jan 19, 2025, bonus depreciation is back to 100%. “Acquired” generally means the binding contract date; “placed in service” means ready and available for use.
Who benefits: S-Corporations, Partnerships, C-Corporations Schedule C, E, F filers, and businesses planning 2025 equipment purchases or interior buildouts.
What qualifies (quick list):
MACRS ≤20-year assets (equipment, computers, furniture, many site/land improvements).
Qualified Improvement Property (QIP): interior, non-structural improvements to non-residential buildings.
Used property can qualify if new-to-you and not from a related party.
Timing rules that matter:
Contracts before 1/20/25 may lock you into phased-down bonus depreciation; on/after 1/20/25 can unlock 100% bonus depreciation.
Delivery alone isn’t enough. The purchased item must be installed and ready for use.
Action steps (do these):
Plan installation/commissioning: Ensure assets are ready for intended use by your target date; get vendor sign-off or commissioning documents.
Clarify ownership on build-outs: In leases/turnkey agreements, specify whether landlord or tenant owns improvements—ownership drives who claims bonus.
Assemble a documentation packet: Keep the binding contract, change orders, delivery records, install/ready-for-use evidence (photos, punch lists), and depreciation classifications.
For vehicles and used assets: Capture gross vehicle weight evidence and start business-use logs on day one; for used assets, document that there’s no prior use by you and/or related parties.