Editor's note: 2024 was the third year of TCJA's bonus depreciation phasedown: 60% bonus, down from 100% (2017-2022) and 80% (2023). The drop in bonus percentage materially changed the economics of real estate cost segregation, equipment-heavy acquisitions, and year-end capital planning. OBBBA's restoration of 100% bonus depreciation in 2025 makes 2024 a one-year valley between two peaks.
For tax year 2024, the bonus depreciation percentage under IRC §168(k) ¹ was 60%, down from 80% in 2023 and 100% in 2017-2022. The TCJA phasedown schedule ⁴ was set to drop further to 40% in 2025, 20% in 2026, and zero in 2027. For our real-estate, manufacturing, and equipment-heavy clients, 2024 was a year of difficult timing decisions: accelerate, defer, or capture 60%, that OBBBA's July 2025 restoration retroactively partially reversed.
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