The One Big Beautiful Bill Act (OBBBA) has radically reshaped the business investment landscape. While taxpayers had been anticipating a gradual phase-down of tax breaks, the recent resurgence of legislation has again raised the spotlight on bonus depreciation for companies’ 2026 tax planning.
What are the “Restored Full Expensing” rules?
Bonus depreciation was set to gradually phase out under the TCJA, starting at 40% in 2025 and then to 20% in 2026. That was eventually cleared by the OBBBA, though. Businesses can once again take a 100% deduction in the first year the new rules are in effect, on qualifying capital investments they place in service, rather than deducting over several years. The IRS audit attorney from San Diego or from another place can help with full expensing.
Which types of property qualify for 100% bonus depreciation?
In order to qualify for the full 100% depletion in 2026, the asset is required to be “qualified property” in general. This includes:
- MACRS Property: Assets with a useful life of 20 years or less (such as office furnishings, machinery, equipment).
- Computer Software: Basic business-related computer software, most of which is available in the market.
- Qualified Improvement Property (QIP): Interior improvements to non-residential real property.
- New under the OBBBA: the exception for qualified Sound Recordings, which is now available and qualifies like film and television.
Does the “New vs. Used” rule still apply?
Yes. The business-friendly aspects of the current law include its coverage of both new and used property. As long as the used equipment has not been used before by your business (or a related party) and you do not get it from a related party, it should qualify for the 100% deduction.
How does the acquisition date affect eligibility?
The key element to remember with 2026 filings is timing. IRS Notice 2026-11 requires that this property be acquired after Jan. 19, 2025, and is put to use after that date as well. However, if a binding contract was signed prior to this date, the asset could end up being subjected to the older and lower rates for the phase-down. The eligibility factor can be verified with an expert or an IRS audit lawyer from Los Angeles or other places.
Can businesses opt out of 100% bonus depreciation?
Though defaulted as “full expensing”, it is not always the most advantageous approach. A business can choose to pay a lower rate (e.g., 40%) or pay nothing at all for each property class. Helps to avoid making a loss (Net Operating Loss), which may be limited or to retain deductions in future years if the business is anticipated to be in a higher tax bracket.
Conclusion
100% bonus depreciation is an important success for the capital-intensive sectors in 2026. The instant money-back would prove useful for the government to offer instant cash flow to encourage investments and subsequent development.
Given the wide notice of eligibility requirements and the specific asset classification and acquisition dates, businesses are certain to need guidance from a tax expert if they want to ensure they are compliant with these strict documentation protocols set by the IRS.
