Section 168(k) Bonus Depreciation After OBBBA

Prior to OBBBA, bonus depreciation was phased out by an additional 20% annually, so that the 100% deduction allowed in 2022 was slated to be 40% for 2025. OBBBA has permanently restored the 100% deduction and added a new deduction for QPP. Qualified property, including certain nonresidential real estate subject to 39-year depreciation, can be immediately expensed if the qualifying criteria are met.

The interplay with Section 179 and whether it or bonus depreciation is more valuable remains a critical tax-saving determination. Since bonus depreciation is mandatory, tax professionals must understand Section 168(k) requirements and the new Section 168(n) to determine whether property qualifies, and how, in some instances, to elect out of bonus depreciation treatment.

Listen as our experienced panel provides a thorough and practical exploration of Section 168(k) bonus depreciation provisions, outlines the new QPP rules, and offers scenarios applying the guidelines to maximize taxpayer savings.  

I. 168(k) bonus depreciation provisions after OBBBA

II. Qualifying property under 168(k)

III. Bonus depreciation for QPP

IV. Percentage deductible by year

V. Section 179 vs. 168(k) deductions

VI. Calculating the depreciation deduction

VII. Electing out

VIII. State treatment of bonus depreciation

IX. Planning opportunities and risks

The panel will discuss these and other priority topics:

• What rules determine whether property qualifies for the 100% first-year depreciation deduction under Section 168(k)?
• New IRC Section 168(n) for QPP
• When should a taxpayer elect out of bonus depreciation treatment?
• When is Section 179 a better alternative to bonus depreciation?

Learning Objectives

After completing this course, you will be able to:

• Identify situations when electing out of bonus depreciation could benefit a taxpayer
• Determine how state treatment of bonus depreciation varies
• Decide what property qualifies as QPP under new Section 168(n)
• Ascertain when Section 179 is more advantageous than the 168(k) deduction

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite:

  Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of individual income taxation, including itemized deductions, individual income tax credits, net operating loss limitations including carrybacks and carryforwards.

  
  

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IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).