By Ron Kerridge and Ashley P. Withers

Businesses looking to purchase certain property (e.g., equipment, machinery, vehicles, furniture) to use in their business now have a few extra incentives for doing so. Under recently enacted provisions in the “One Big Beautiful Bill Act” (the “OBBBA”), the following tax incentives are now available:

• Permanent reinstatement of 100% bonus depreciation for “qualified property” placed in service after Jan. 19, 2025.
• Increase in the maximum amount of Section 179 property that a taxpayer can expense to $2.5 million, reduced by the amount by which the cost of qualifying property exceeds $4 million.
• New option to elect 40% bonus depreciation (60% for long production period property and qualified aircraft).
• New election available for 100% bonus depreciation for “qualified production property” placed in service before Jan. 1, 2031, with an extension possible due to acts of God. Defines “qualified production property” to include any portion of nonresidential real property used as an integral part of qualified manufacturing, agricultural, or chemical production, or refining of a “qualified product” that results in a substantial transformation of the product.

Particularized requirements must be met to qualify for any of these deductions. To discuss how your business might qualify, please contact our tax attorneys today.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice. For more information, please contact a member of the Tax practice.

Meet Ron

Ron Kerridge is a seasoned federal income tax lawyer with a practical approach. He focuses on both transactional tax matters and tax controversies. Ron advises clients on tax structuring for acquisitions and strategic partnerships, with particular experience in health care deals. He counsels on taxable and tax-free acquisitions, representation and warranty insurance claims, qualified small business stock planning, and C corporation strategies. Ron also handles issues involving S corporations, LLCs, partnerships, real estate (including 1031 exchanges), oil and gas tax matters, and the tax aspects of settling commercial and employment litigation.

Meet Ashley

Ashley P. Withers helps businesses and taxpayers with federal tax matters that impact their lives. In her tax controversy practice, she has successfully defended clients in IRS audits and appeals and secured favorable private letter rulings. Most recently, she secured a finding of “no deficiency” for an employer undergoing a complex employee retention credit (ERC) tax audit involving a potential $1 million+ tax liability. In her transactional practice, she helps buyers and sellers think through how to appropriately address pre- and post-closing tax liabilities, including potential ERC liabilities.