Maximize Reinstated 100% Bonus Depreciation and Qualified Production Property Incentives from ‘One Big Beautiful Bill’ with a Cost Segregation Study

The recently passed “One Big Beautiful Bill” (OBBB) makes a major change for business owners and investors, restoring 100% bonus depreciation permanently, and introducing a powerful new incentive for manufacturers called Qualified Production Property (QPP). These changes can significantly boost cash flow in the short term, but only if you know how to take advantage of them. The best tool to help unlock these benefits is a Cost Segregation Study.

What 100% Bonus Depreciation means for you

Properties placed in service on or after January 19, 2025, can once again deduct 100% of qualifying assets in the year they are placed in service.

Under the previous law, this benefit was scheduled to phase out, which reduced its value over time. The new legislation has eliminated that phase-out.

A Cost Segregation Study can identify parts of a property, such as accent lighting, specialty flooring, millwork, specialized building systems, and land improvements, that can be accelerated into shorter recovery lives. With 100% bonus depreciation, those assets aren’t just accelerated; they are fully deductible in year one.

Opportunities for developers, owners, and lessees who have made significant improvements

 The following parties could benefit in the following ways:

• Property owners and developers can recover costs for office buildings, retail centers, medical facilities, and multifamily properties right away.

• Manufacturers and capital-intensive businesses can deduct large equipment purchases immediately.

• Tenants who put significant money into improvements on leased property can also reap major savings.

Faster deductions mean more cash flow for your business NOW rather than being spread out over decades.

New incentive for manufacturers: Qualified Production Property

OBBB also introduces Qualified Production Property (QPP), a major tax break designed to support U.S. manufacturing and production. This incentive applies to the parts of a facility that are directly tied to production, such as the manufacturing floor, mezzanines, roofing, or building systems like electrical and plumbing. Before OBBB, these assets were considered 39-year property. Now, if they qualify as QPP, they can receive 100% bonus depreciation.

More details on QPP

Similar to the opportunity available with 100% bonus depreciation, there are different situations in which QPP would apply.

The property must be used as an integral part of Qualified Production Activity (QPA), and the original use of the property must commence with the taxpayer claiming the deduction.

• New builds: Construction must begin between January 19, 2025, and December 31, 2028, and be placed in service by December 31, 2030.

• Acquisitions: Properties acquired during this same window may also qualify if they meet certain requirements. They can be placed in service by January 1, 2031

The one caveat; office and administrative areas don’t qualify only areas used directly for production activities. A Cost Segregation Study is critical here because it ensures that the right parts of a property are identified as QPP, so you don’t miss out on valuable deductions.

Why Cost Segregation?

Both 100% bonus depreciation and QPP incentives turn cost segregation from a “nice-to-have” into an essential planning tool. A professional study provides:

• Bigger tax deductions now instead of waiting years to recover costs
• Stronger cash flow that can be reinvested into growth
• Clear documentation to support compliance in the event of IRS intervention

Next steps for business owners

If you are planning to purchase, newly construct, expand, or renovate property, or if you operate a manufacturing facility, now is the time to explore how a Cost Segregation Study can unlock these new tax benefits. With the permanent restoration of 100% bonus depreciation and the creation of QPP, the savings potential is bigger than ever. Fill out the form on this page to connect with our Cost Segregation Study Practice and determine if it is the right fit for your business.