Q&A: How to Qualify for 100% Bonus Depreciation Under Trump’s 2025 Tax Bill

On July 4, 2025, President Trump signed the “One Big Beautiful Bill Act” (OBBBA), which includes a key provision for real estate investors: the return of 100% bonus depreciation for qualifying property placed in service on or after January 20, 2025.

Here’s what you need to know—broken down by common investor situations:

Q: If I buy a property and place it in service on January 15, 2025, do I get 100% bonus depreciation?

A: No. In this case, the property was both acquired and placed in service before January 20, 2025. That means it falls under the prior bonus depreciation phase-out schedule. For most qualifying assets, the applicable rate would be 40% bonus depreciation in 2025 for acquisitions and placements made before January 20.

Q: What if I buy a property on January 1, 2025, but don’t place it in service until April 1, 2025? Do I qualify then?

A: Still no. Bonus depreciation eligibility under the new law depends on both the acquisition date and the placed-in-service date. In this example, the acquisition happened before January 20, so even if the placed-in-service date is after, you would still only get 40% bonus depreciation for eligible components—not 100%.

Q: What if I bought a property in 2023 as a personal residence and convert it to a rental on June 1, 2025? Can I take 100% bonus depreciation?

A: You cannot take 100% bonus depreciation on the original structure itself. The building will be depreciated over 27.5 years (or 39 years for non-residential property), and bonus depreciation is not available for that part. However, if you install new qualifying assets—such as appliances, furniture, or 15-year land improvements—on or after January 20, 2025, those assets may qualify for 100% bonus depreciation, assuming they meet the criteria under MACRS with a useful life of 20 years or less.

Q: I’ve had a duplex under construction since December 2024, and it will be completed and placed in service in June 2025. Do I get 100% bonus depreciation?

A: No, but you may still qualify for 60% bonus depreciation. Under IRS rules, self-constructed property is considered “acquired” when construction begins. Since construction began in 2024, the property falls under the pre-OBBBA rules, which offer 60% bonus depreciation for assets placed in service in 2025. You would not qualify for the new 100% bonus depreciation under the One Big Beautiful Bill Act, which only applies to property acquired and placed in service on or after January 20, 2025.

Q: I bought a property in 2024 and spent $150,000 on major renovations in March 2025. Can those improvements qualify for 100% bonus depreciation?

A: Possibly. The original purchase will fall under the 2024 rules, which allowed 60% bonus depreciation on eligible property. However, the renovations completed after January 20, 2025 can qualify for 100% bonus depreciation—if the assets fall into a qualifying class (such as 5-, 7-, or 15-year property under MACRS). Examples might include new appliances, carpet, cabinets, HVAC units, or landscaping.

Q: I bought a boat on January 1, 2025 to use in my charter rental business, but it’s not delivered or placed into service until June 1, 2025. Does it qualify for 100% bonus depreciation?

A: No. Even though the asset is placed in service after January 20, it was acquired before that date. Therefore, it would only qualify for 40% bonus depreciation under the transition rules. Bonus depreciation requires both acquisition and placed-in-service dates to occur on or after January 20, 2025.

Final Thoughts

Under the new OBBBA legislation, 100% bonus depreciation is only available for qualifying property acquired and placed in service on or after January 20, 2025. Anything purchased before that date—even if placed in service afterward—generally follows the 40% or 60% phased-down rates, depending on year and context.

That said, new improvements or additions made in 2025 may still qualify for full bonus depreciation, even if the property itself was acquired in an earlier year. Investors should carefully document acquisition dates, placed-in-service timing, and classification of assets (e.g., land improvements vs. structural components) to maximize their tax position.

If you’re unsure whether your situation qualifies, or you want to plan strategically around upcoming purchases and renovations, book a free consultation to lock in these enhanced deductions while they’re available.