100% bonus depreciation: the 19 January 2025 acquisition line

By Max Medvedev · 6 Aug 2026

Two dates decide the rate, and the first one is not the closing

Property both acquired and placed in service after 19 January 2025 gets 100% bonus depreciation, permanently, under OBBBA. "Acquired" means the written binding contract date, not the closing. A contract signed 15 January 2025 caps the same property at 40% however late it closes. Every other rate comes from a schedule that no longer applies to new purchases.

The trap is keying off one date

Most calculators ask when the property was placed in service and stop there. The statute has two conditions, and both have to hold: the property must be acquired after 19 January 2025 and placed in service after 19 January 2025.

The second one is easy. The first one is where the money moves, because "acquired" is not the day the deed records:

• A written binding contract fixes the acquisition date. Sign on 15 January 2025, close on 12 March 2025, furnish and list in June — that is a pre-20-January acquisition, and the 5- and 7-year property in it is capped at 40%.
• Self-constructed property is acquired when physical construction begins, not when the plans were drawn or the lot was bought.

One line in a purchase agreement, written before most buyers had heard of OBBBA, can be worth six figures of first-year deduction. It is the first thing to check on any 2025 acquisition and the last thing most tools ask about.

The rate table, both regimes

OBBBA was signed 4 July 2025 and made 100% bonus permanent going forward. IRS Notice 2026-11, issued 14 January 2026, supplied the mechanics and adopted the familiar pre-existing regime rather than inventing a new one.

The old TCJA phase-down — 40% in 2025, 20% in 2026, 0% in 2027 — did not disappear. It survives, but only for pre-20-January-2025 acquisitions. For anything acquired after that date, the schedule is dead.

That distinction is the single most common wrong number in this subject. A calculator that shows 20% for 2026 is running the superseded schedule and understating a first-year deduction by a factor of five. A calculator that shows 100% for every 2026 filing is running the new one without the acquisition-date condition, and will overstate the deduction on a property whose contract was signed in the first nineteen days of 2025. Both errors are the same mistake: one date where the statute has two.

OBBBA also allows a transitional election to apply 40% — 60% for certain longer-production property — instead of 100% for the first tax year ending after 19 January 2025. It is narrow, and it is an election, not a default.

What the 100% actually attaches to

Bonus under §168(k) covers qualified property: a MACRS recovery period of 20 years or less. In a short-term rental that means the classes a cost segregation study carves out — 5- and 7-year personal property, 15-year land improvements, 15-year qualified improvement property.

It never covers the building shell. A short-term rental with an average stay of 30 days or less is nonresidential under §168(e)(2) and depreciates its shell over 39 years, straight-line, mid-month, at no more than a 39th a year. Bonus does not touch it.

So the size of the first-year number is set by the study, not by the rate. A typical study moves 20–30% of building basis into the short-life classes: on a $1M property, often $200,000–300,000 written off in year one once 100% applies.

A prior-year purchase keeps its old rate

An owner who bought in 2023 or 2024 and never ran a study is not too late. Form 3115 (automatic consent, DCN 7), filed with the current-year return, claims the cumulative missed acceleration as a one-time §481(a) catch-up. No amended returns — the IRS requires the 3115 route.

The catch-up lands in the current year. The rate does not travel with it. Bonus is fixed by the property's original placed-in-service year, so 2023 property catches up at 80% and 2024 property at 60%, in a 2026 return. Being told the catch-up comes in at 100% is over-promising by a quarter or more.

Taking the full 100% is not automatically right

Bonus is elective by class under §168(k)(7). Electing out is sometimes the better answer:

• A deduction bigger than the year can absorb runs into the section 461(l) excess business loss cap — $256,000 single, $512,000 married filing jointly for 2026 — and the overflow becomes a carryforward rather than cash this year.
• Electing out preserves a positive QBI base and smooths income across years instead of spiking one.

The right move is a comparison between two computed years, not a reflex toward the largest number.

None of it reaches your W-2 on its own

A 100% first-year write-off is a Schedule E deduction. It offsets wage income only if the loss is non-passive, and that is a separate question with its own tests: an average stay of seven days or less under Reg. §1.469-1T(e)(3)(ii)(A) removes the automatic passive label, and material participation under Reg. §1.469-5T(a) must then be proven on top of it. Passing the average-stay test alone does nothing for the loss. In Mirch v. Commissioner, T.C. Memo 2025-128, the property met the seven-day definition and the entire loss was still disallowed on the hours.

The date on your purchase contract decides the rate. The log decides whether the deduction lands anywhere.

Check your own two dates

Run your contract date, placed-in-service date, and purchase price through the estimator — it applies the acquisition-date test before the rate, forks the shell life on the 30-day line, and cites the rule behind each figure.