100% bonus depreciation and the January 19, 2025 date rule

Written by Landon RoseLast updated 2026-10-07Pending review by a Certified Cost Segregation Professional

Qualifying property acquired after January 19, 2025 gets 100% bonus depreciation permanently under the 2025 tax law. For purchases, “acquired” generally means the date of a written binding contract, not the closing date. Property under a binding contract on or before January 19, 2025 stays on the older phase-down: 40% if placed in service in 2025 and 20% in 2026.

The rule in one table

Binding contract datePlaced in serviceBonus rate
After Jan 19, 2025Any year100%
On or before Jan 19, 2025202540%
On or before Jan 19, 2025202620%

Why the contract date matters more than closing

If you signed a binding purchase contract on January 10, 2025 and closed in March, the property was acquired on or before the cutoff, so the phase-down rate applies even though you closed later. A contract signed January 25, 2025 qualifies for 100%. Keep the signed contract with your study records.

What qualifies

Bonus depreciation applies to property with a recovery period of 20 years or less: the furniture, appliances and fixtures (5- and 7-year property) and land improvements like patios and landscaping (15-year property) that a cost segregation study identifies. The building itself (27.5 or 39 years) doesn't qualify. That's why a study is what unlocks the deduction.

Choices you can make

For the first tax year ending after January 19, 2025, you can elect 40% instead of 100%, and you can always elect out of bonus depreciation for a class of property. Your CPA decides which fits your situation.

Sources

This article is general information, not tax advice. Confirm how it applies to you with your tax professional.

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