#bonus-depreciation
First-year bonus depreciation rules, qualifying property, and tax savings under the One Big Beautiful Bill Act
When you sell depreciated business property, Section 1245 recaptures prior depreciation as ordinary income (up to 37%), while Section 1250 caps the recapture on real estate at 25% — turning a 100% bonus depreciation deduction into a large tax bill at exit unless you plan with cost segregation, 1031 exchanges, and a clean fixed-asset register.
OBBBA permanently restored 100% bonus depreciation and raised the Section 179 cap to $2.56M for 2026. A practical framework for small businesses to choose between them — covering taxable-income limits, state decoupling, SUV caps, and the new Section 168(n) qualified production property deduction.
A practical guide to Section 469(c)(7) Real Estate Professional Status — the 750-hour and more-than-half tests, the spousal rule, material participation and the grouping election, common audit failures, and how 100% bonus depreciation in 2026 makes REPS worth the documentation cost.
A cost segregation study uses engineering-based analysis to move 20–45% of a building's basis from 27.5- or 39-year straight-line into 5, 7, and 15-year MACRS classes. Combined with the 100% bonus depreciation permanently restored by the One Big Beautiful Bill Act for property placed in service after January 19, 2025, real estate investors can convert a routine $91,000 first-year deduction into roughly $766,000 — provided they clear IRC §469 passive activity loss limits via real estate professional status, the short-term rental rule, or passive income offsets.
A 2026 decision guide for small businesses choosing between Section 179's $2.56M cap and OBBBA's permanent 100% bonus depreciation, with order-of-operations rules, hybrid examples, and state-conformity caveats.
Section 461(l) caps 2026 excess business losses at $128,000 single and $256,000 joint, per the OBBBA. Pass-through owners use Form 461 to report the limitation.
OBBBA permanently restored the EBITDA-based ATI calculation for Section 163(j) starting in 2025, expanding deductible business interest for capital-intensive companies. A guide to the 30% cap, the ~$31M small business exemption, the 35% syndicate trap, EBIE allocations from partnerships, S-corp differences, and Form 8990 reporting.
Section 280F caps first-year depreciation on passenger autos at $20,300 in 2026, but SUVs and trucks rated above 6,000 lbs GVWR escape those limits and can combine a $32,000 Section 179 deduction with 100% bonus depreciation. A practical guide to the 2026 numbers, the heavy-vehicle and pickup carve-outs, the 50% business-use cliff, and the mileage-log standards an IRS auditor expects.
How short-term rentals sit outside the Section 469 passive loss rules, what the seven-day average and material participation tests actually require, and how a six-figure W-2 earner can use cost segregation and 100% bonus depreciation to legally offset wage income.
OBBBA made the 20% QBI deduction and 100% bonus depreciation permanent for 2026, while tariffs near 19% cost U.S. small businesses about $85 billion a year. Here is what changed, who benefits, and how to plan.
A cost segregation study reclassifies a building's components into shorter MACRS lives, unlocking the 100% bonus depreciation permanently restored by the One Big Beautiful Bill Act of July 2025. On a $1M residential rental, that swings first-year tax savings from roughly $10,700 to roughly $90,600—provided the investor clears IRC §469 passive activity loss limits.
