AE Tax Advisors details year-end 100% bonus depreciation rules

AE Tax Advisors, a Billings, Montana tax firm serving clients in 47 states, has issued year-end guidance on the permanent 100% bonus depreciation rules now in effect under federal law. The firm says the key deadline is Dec. 31 for assets that must be acquired and placed in service to qualify in 2026.

Why it matters: - Business owners and real estate investors can still miss out on 100% bonus depreciation if they miss either the acquisition test or the placed-in-service test. - The deadline affects 2026 tax planning because calendar-year taxpayers must put qualifying assets in service by Dec. 31 to deduct them in the current year. - Real estate investors often rely on cost segregation to accelerate deductions on building components that qualify for bonus depreciation.

What happened: - AE Tax Advisors published year-end planning guidance on 100% bonus depreciation for business owners and real estate investors. - The Billings, Montana firm serves clients in 47 states. - The guidance focuses on the Dec. 31 placed-in-service deadline and the documentation needed before year-end. - The One Big Beautiful Bill Act, signed July 4, 2025, permanently reinstated 100% bonus depreciation under Internal Revenue Code Section 168(k) for qualified property acquired and placed in service after Jan. 19, 2025. - The prior scheduled phase-down would have cut the rate to 40% in 2025.

The details: - Qualified property generally includes most new and used tangible personal property with a recovery period of 20 years or less. - Property acquired on or before Jan. 19, 2025 remains subject to the older phase-down rates, even if it is placed in service later. - For calendar-year taxpayers, the asset must be placed in service by Dec. 31 to qualify for the current-year deduction. - AE Tax Advisors says the fourth quarter is the key planning window, not the filing season that follows. - Christina Nortman, CPA, Managing Partner for the Northeast Region at AE Tax Advisors, said the permanent benefit has reduced deadline pressure but not the underlying timing rules. - Nortman said the acquisition date and placed-in-service date still decide the outcome, and both are fixed by Dec. 31. - For real estate investors, cost segregation can reclassify parts of a building into shorter recovery periods. - Those reclassified components can then be eligible for bonus depreciation in the year the property is placed in service. - AE Tax Advisors says it has completed more than 500 cost segregation studies. - The firm prices cost segregation studies at $1 per square foot. - The firm’s year-end process starts with a confidential tax assessment and a complimentary three-year lookback. - AE Tax Advisors then builds a multi-year strategy based on the client’s income and entity structure. - The firm also provides quarterly reviews and mid-year projections. - Advisory services include entity structuring, reasonable compensation for S-corporation owners, Section 179 planning for equipment, multi-state and nexus analysis, retirement and exit planning, and IRS representation.

Between the lines: - The new permanence may tempt some owners to delay action, but the tax benefit still depends on tight timing rules. - The guidance signals that year-end planning remains a documentation and execution exercise, not just a policy update. - Cost segregation remains a core tool for investors because it can move more building costs into faster depreciation buckets. - AE Tax Advisors also notes that tax outcomes depend on each taxpayer’s facts and circumstances, and published case results are not typical or guaranteed.

What's next: - Business owners and investors will need to confirm acquisition dates, placed-in-service dates, and supporting records before Dec. 31. - Real estate buyers and developers may continue to use cost segregation studies to maximize current-year deductions. - AE Tax Advisors says clients can continue year-round planning through its tax advisory services. - More information is available at AE Tax Advisors.