Bonus depreciation by placed-in-service date

The rate is set by the placed-in-service date

Bonus depreciation under IRS Pub 946 and IRC §168(k) lets you deduct a percentage of a qualifying asset's basis in its first year of service, on top of regular MACRS depreciation. A cost segregation study is what makes that lever useful: it carves a building's basis into shorter-life classes — typically 5-, 7-, and 15-year property — that are eligible for bonus, instead of leaving everything buried in 39-year real property, which is not.

The single most important rule to understand: the bonus rate is fixed by the date the property was placed in service, not the date you run the study or file the return. A pad placed in service in 2022 carries its 2022 rate even if the study is done in 2026. When you reach back to a prior year through a study performed after the fact (a "lookback"), you do not file amended returns for each year — you catch up the missed depreciation in the current year through a Form 3115 change in accounting method, and the §481(a) adjustment is computed using the bonus rate that was in effect for the original placed-in-service year. The date controls; the calendar of when you act does not.

The timeline (and the 2025 split)

Here is the full federal first-year bonus rate by placed-in-service date. Note that 2025 is a split year: a property placed in service in the first nineteen days of January 2025 lands on the final phase-down step of the original Tax Cuts and Jobs Act schedule, while anything placed in service on or after January 20, 2025 falls under the restored permanent rate.

Two points are easy to get wrong. First, do not treat 2025 as a flat 100% year — the 40% rate for January 1–19 is the real, final TCJA phase-down step and applies to assets placed in service in that window. Second, the old sunset that would have dropped bonus to 20% in 2026 and 0% in 2027 no longer applies. Under current law, 2026 and every year after sits at a permanent 100%.

What OBBBA changed

The One Big Beautiful Bill Act (OBBBA), signed in July 2025, permanently restored 100% bonus depreciation for qualifying property placed in service on or after January 20, 2025. It removed the scheduled sunset entirely, so there is no longer a year in which the rate steps down to 20% or zero. That is the headline: bonus is back to full and, under current law, it stays there.

What OBBBA did not do is reach backward over the start of 2025. Property placed in service January 1–19, 2025 remains at 40% — the restoration is forward-looking from January 20. If you closed and placed a net-lease pad in service in that brief window, that is the rate your reclassified components carry, and a study run today will model it that way rather than assuming the full restored figure.

Why it matters on a net-lease pad

Single-tenant net-lease pads — a quick-service restaurant, a drive-thru pharmacy, a convenience store, an auto-service box — are unusually well suited to bonus depreciation. A large share of the building's basis is exactly the kind of property a study moves into shorter classes: paving, curbs, site lighting, signage, landscaping, and underground utilities (typically 15-year land improvements), plus dedicated finishes, specialty equipment, and decorative or process-related fixtures (5- and 7-year personal property). All of it is bonus-eligible. See what reclassifies on a net-lease pad for the component-level detail.

Because so much of the reclassified pool qualifies for bonus, the placed-in-service rate is the single biggest driver of the year-one number. The same pad with the same study can produce a very different first-year deduction depending only on which row of the table above its in-service date falls on. A worked illustration is in the example study, and if you acquired the property through a like-kind exchange, the basis interaction is covered in 1031 exchanges and cost seg.

A few caveats worth stating plainly. Every tax-side figure here — and in any study we produce — is an estimated, modeled amount. Your CPA and the actual placed-in-service date determine the number that gets filed, after factoring in the §481(a) catch-up on a lookback, §469 passive-activity limits, your entity structure, and any elections. And bonus depreciation is a federal rule: many states decouple from §168(k) and either disallow bonus or require their own add-back, so your state result can differ materially from the federal figure. None of this is tax advice. For background on the underlying depreciation framework, see irsdepreciationrules.com, and start an estimate any time from the guides home.