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Certain Qualified Property Acquired after September 27, 2017, and Before January 20, 2025: Business Depreciation (2025 IRS Guide)

This guide covers “Certain Qualified Property Acquired after September 27, 2017, and Before January 20, 2025” within business depreciation. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 946 (2025), How To Depreciate Property, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

You can take a special depreciation allowance for the following types of property.

  • Qualified reuse and recycling property.

  • Certain qualified property acquired after January 19, 2025.

  • Certain qualified property acquired after September 27, 2017, and before January 20, 2025.

  • Certain plants bearing fruits and nuts planted or grafted after January 19, 2025.

  • Certain plants bearing fruits and nuts planted or grafted before January 20, 2025.

  • Qualified production property.

The following discussions provide information about the types of property listed above for which you can take a special depreciation allowance.

Certain Qualified Property Acquired after September 27, 2017, and Before January 20, 2025

Unless you elect out, you must take a 40% special depreciation allowance for certain qualified property acquired after September 27, 2017, and placed in service after December 31, 2024, and before January 1, 2026 (other than certain property with a long production period and certain aircraft). If the property was acquired before January 20, 2025, you can elect to take a 60% special depreciation allowance for certain property with a long production period and certain aircraft acquired and placed in service after December 31, 2024, and before January 1, 2026. Your property is qualified property if it meets the following.

  • Tangible property depreciated under MACRS with a recovery period of 20 years or less.

  • Computer software defined in and depreciated under section 167(f)(1) of the Internal Revenue Code.

  • Water utility property.

  • Qualified film, television, and live theatrical productions, as defined in sections 181(d) and (e) of the Internal Revenue Code.

  • Qualified sound recording productions, as defined in section 181(f) of the Internal Revenue Code, of which production commenced in tax years ending after July 4, 2025.

  • A specified plant for which you made the election to apply section 168(k)(5) for the tax year in which the plant is planted or grafted (explained later under Certain Plants Bearing Fruits and Nuts Planted or Grafted Before January 20, 2025).

  • It is not excepted property (explained later under Excepted Property).

Qualified property must also be placed in service before January 1, 2026, and can be either new property or certain used property.

Long Production Period Property

To be qualified property, long production period property must meet the following requirements.

  • The property has a recovery period of at least 10 years or is transportation property. Transportation property is tangible personal property used in the trade or business of transporting persons or property.

  • The property is subject to section 263A of the Internal Revenue Code.

  • The property has an estimated production period exceeding 1 year and an estimated production cost exceeding $1 million.

  • If the property was acquired before January 20, 2025, you must have acquired the property, or acquired the property pursuant to a written contract entered into, before January 1, 2026. See section 168(k)(2)(B) of the Internal Revenue Code as in effect prior to amendment by section 70301 of P.L. 119-21.

Noncommercial Aircraft

To be qualified property, noncommercial aircraft must meet the following requirements.

  • The aircraft must not be tangible personal property used in the trade or business of transporting persons or property (except for agricultural or firefighting purposes).

  • The aircraft must be purchased (as discussed under Property Acquired by Purchase in chapter 2) by a purchaser who at the time of the contract for purchase makes a nonrefundable deposit of the lesser of 10% of the cost or $100,000.

  • The aircraft must have an estimated production period exceeding 4 months and a cost exceeding $200,000.

  • If the property was acquired before January 20, 2025, you must have acquired the aircraft, or acquired the aircraft pursuant to a written contract entered into, before January 1, 2026. See section 168(k)(2)(C) of the Internal Revenue Code as in effect prior to amendment by section 70301 of P.L. 119-21.

Special Rules

Syndicated leasing transactions.

If qualified property is originally placed in service by a lessor, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale.

Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of the last sale if the property is sold within 3 months after the final unit is placed in service and the period between the time the first and last units are placed in service does not exceed 12 months.

Excepted Property

Qualified property acquired after September 27, 2017, does not include any of the following.

  • Property placed in service, or planted or grafted, and disposed of in the same tax year.

  • Property converted from business use to personal use in the same tax year acquired. Property converted from personal use to business use in the same or later tax year may be qualified property.

  • Property required to be depreciated under the Alternative Depreciation System (ADS). This includes listed property used 50% or less in a qualified business use. For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies? in chapter 4.

  • Property for which you elected not to claim any special depreciation allowance (discussed later).

  • Property described in section 168(k)(9)(A) and placed in service in any tax year beginning after December 31, 2017.

  • Property described in section 168(k)(9)(B) and placed in service in any tax year beginning after December 31, 2017.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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