Summary
The IRS issued new guidance on a tax break for production facilities, allowing for up to a 100% depreciation deduction. This benefit is part of a new tax law aiming to boost manufacturing and production investments, with clear details outlined for its application.
Key Facts
- The IRS released guidance for a tax deduction on certain production properties.
- The guideline is part of the One Big Beautiful Bill (OBBB) aimed at encouraging investment.
- The deduction allows for up to 100% depreciation of eligible property in the year it is used.
- Qualified production property includes nonresidential real estate like factory buildings.
- Activities covered include manufacturing, chemical production, and refining.
- The benefit applies to property in service between July 4, 2025, and January 1, 2031.
- Taxpayers must choose to treat their property as qualified production property.
- This guidance can be used immediately, with further detailed regulations planned.
