The Department of the Treasury and the Internal Revenue Service are providing taxpayers with guidance on the permanent 100 percent additional first year depreciation deduction for eligible depreciable property acquired after Jan. 19, 2025, provided by the One, Big, Beautiful Bill.

Generally, when taxpayers acquire property for business use, they must depreciate it over several years based on various depreciation schedules.

Under the OBBB, taxpayers may elect:

• To deduct 40-percent (60-percent for certain property having longer production periods or certain aircraft) instead of the 100-percent additional first year depreciation deduction for qualified property placed in service during the first tax year ending after Jan. 19, 2025,

• To deduct additional first year depreciation for one or more specified plants,

• To treat certain acquired or self-constructed components of larger self-constructed property as generally eligible for the additional first year depreciation deduction, and

• Not to deduct the additional first year depreciation for a qualified sound recording production.

In addition, the notice provides interim guidance for qualified sound recording productions. In general, a qualified sound recording production:

• Is treated as acquired on the date principal recording commences,

• Is considered placed in service at the time of initial release or broadcast, and

• Qualifies for the additional first year depreciation deduction if the sound recording production commences in a taxable year ending after July 4, 2025.