08/29/2025
Hey all,
My name is Tai Nguyen. I am an Enrolled Agent in charge at Tax Help Office in Downtown San Jose. Thank you for joining us in the first of many recordings to come as we discuss current tax issues. In today’s topic, we will be discussing the passage of President Donald Trump’s One Big Beautiful Bill and the expansion of Section 179 depreciation. The big bill is 870 pages long. Henceforth, we will cover each part of the bill in separate recordings. We hope you enjoy our video. If you do, press that subscribe button to be on top of current tax issues and events.
On July 4 of 2025, President Trump signed the One Big Beautiful Bill into law. This bill extends many of tax provisions included in President Trump’s first term’s Tax Cuts and Jobs Act. Section 179 bonus depreciation was looking at a decreasing rate of 40% in tax year 2025; 20% in tax year 2026; and 0% in tax year 2027. We will define a qualified property as a tangible personal property with a recovery period of 20 years or less. We will also define a qualified production property as a nonresidential real property used in the manufacturing, production or refining of tangible personal property.
The big bill will eliminate the decreasing rate of Section 179 bonus depreciation. It will, instead, make permanent a bonus depreciation rate of 100% for any qualified property obtained on or after January 20, 2025. If your qualified property was obtained from January 1, 2025 to January 19, 2025, however, it would only qualified for the 40% bonus depreciation. In addition to qualified property, the big bill will also allow a 100% bonus depreciation for any qualified production property constructed on or after January 1, 2025 until December 31, 2033. The qualified production property bonus depreciation is a new depreciation benefit included in the big bill that should be used for real estate purposes.
As a bonus, whenever you take depreciation expense on an asset or property, remember you need to include depreciation recapture once you sell said asset or property. Depreciation expense is used to help you lower tax liabilities via lowering your net profit in the business. The IRS is losing tax monies from the allowance of depreciation expense. Henceforth, the IRS needs to get back whatever they can get from depreciation recapture. We will do a short example video on depreciation expense and recapture.
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#2025 #2026