Bonus depreciation has been one of the more unpredictable provisions over the years, as it seemed to be in a constant state of expiring and being extended. With the passage of the One Big Beautiful Bill (OB3) Act, bonus depreciation is permanent!
It’s not all good news, however. The permanent expansion of bonus depreciation came with a few very dangerous caveats, the most treacherous of which is the “acquired AND placed in service after” requirement.
Generally, it doesn’t really matter when a taxpayer acquires an asset for depreciation purposes. What is more important is the date that they place that asset into service. For bonus depreciation, however, we have to look at both the date that the asset was placed in service AND the date it was acquired.
The OB3 provision sets the bonus depreciation rate back at 100%, but only if the asset was both acquired and placed into service after January 19, 2025.
This means that assets that were acquired prior to January 20, 2025, will be subject to the pre-OB3 rules.
For an asset acquired on January 1, 2025, and placed in service on February 2, 2026, bonus depreciation will be limited to 20%. If that same asset had been acquired on February 1, 2025, and placed in service on February 2, 2026, it would be eligible for 100% bonus depreciation.
This means that tax preparers must be aware of both the acquisition date and the placed-in-service date to apply the correct bonus percentage. For more on this, read our in-depth analysis and watch Ryan review the rules here.