Tax Optimizer

2025

Bonus Depreciation §168(k) (Phase-down 2025–2027)

Category: Depreciation b7 Status: sunsetting

Eligibility

  • C corporations
  • S corporations
  • Partnerships
  • Sole proprietors
  • Acquisition and placed-in-service timing critical.

Computation

Immediate additional first-year deduction at applicable percentage of adjusted basis.

  • Percentage depends on placed-in-service year; election out permitted by class of property.

Documentation & Audit-Readiness

  • Acquisition documents
  • Placed-in-service evidence
  • Asset qualification analysis
  • Placed-in-service date corroboration
  • Used property rules met
  • Election statements if opting out
  • Maintain detailed depreciation schedules and elections.

Interactions & Ordering

  • Apply §179 before bonus; then MACRS.
  • Stackable with: §179 (applied first)
  • Basis: Bonus reduces basis; watch for anti-churning and used property criteria.

References