100% Depreciation for Qualified Production Property

The One Big Beautiful Bill provides a wonderful depreciation deduction (100% of the cost of a manufacturing facility that is “Qualified Production Property”) with some strict boundaries. Some of the pertinent details are summarized below:

1. “Qualified Production Property” is a manufacturing facility that meets the following criteria:
   
   

• The construction or purchase begins after January 19, 2025

• The property must be used by the taxpayer as an integral part of “Qualified

Production Activity” in the United States.  Such activity generally means the manufacturing, production, or refining of tangible personal property, and excludes any portion of the property that is used for offices, parking, sales activity, or administrative services.

• The original use of the property must begin with the taxpayer.

• The property must be placed in service before January 1, 2031.

2. If the taxpayer ceases the manufacturing activity within 10 years, the full depreciation is subject to recapture.

3. The taxpayer cannot lease the property.

We are available to assist in your planning for the 100% depreciation deduction.

By Robert C. Weiss