! figure the recapture amount under

CAUTION rules explained in this discussion when

the percentage of business use drops to 50% or less. Instead, use the rules for recapturing de- preciation explained under Recapture of Excess Depreciation in chapter 5 of Pub. 946.

Figuring the recapture amount. To figure the amount to recapture, take the following steps.

44 Chapter 7 Depreciation, Depletion, and Amortization Publication 225 (2025)

claim a 40% special depreciation allowance for the adjusted basis of certain specified plants (defined later) bearing fruits and nuts planted or grafted after 2024, and before January 20, 2025. A specified plant is:

Any tree or vine that bears fruits or nuts, and
Any other plant that will have more than one yield of fruits or nuts and generally has a pre-productive period of more than 2 years from planting and grafting to the time it begins bearing fruits or nuts.

Any property planted or grafted outside the United States does not qualify as a specified plant.

If you elect to claim the special depreciation allowance for any specified plant, the plant will not be treated as qualified property eligible for the special depreciation allowance in the subsequent tax year in which it is placed in service.

To make the election, attach a statement to your timely filed return (including extensions) for the tax year in which you plant or graft the specified plant(s) indicating you are electing to apply section 168(k)(5) and identifying the specified plant(s) for which you are making the election. Once made, the election cannot be revoked without IRS consent.

See section 168(k)(5) of the Internal Revenue Code as in effect prior to amendment by section 70301(a) of P.L. 119-21.

Certain qualified property acquired and placed in service after January 19, 2025. You can elect to take a 100% special depreciation allowance for certain qualified property acquired and placed in service after January 19, 2025 (including certain property with a long production period and certain aircraft).

Your property is qualified property if it meets the following requirements.

It is one of the following types of property.

a. Tangible property depreciated under

MACRS with a recovery period of 20 years or less.

b. Water utility property depreciated un der MACRS.

c. Computer software defined in and de preciated under section 167(f)(1) of the Internal Revenue Code.

Qualified property can be either new property or certain used property.
It is not excepted property (defined later).

For more information, see chapter 3 of Pub. 946.

Note: For the first tax year ending after January 19, 2025, you can elect to a 40% special depreciation allowance for certain qualified property (other than property with a long production period and certain aircraft) acquired and placed in service after January 19, 2025. For property with a long production period and certain aircraft, you can elect to take a 60% special depreciation allowance in the first tax year ending after January 19, 2025. See chapter 3 of Pub. 946 for details on how to make this election.

Excepted property. Qualified property acquired after January 19, 2025, 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 , later.
Property for which you elected not to claim any special depreciation allowance (discussed later).
Property described in section 168(k)(9)(A) of the Internal Revenue Code.
Property described in section 168(k)(9)(B) of the Internal Revenue Code.

duction property if it meets the following requirements.

The property is used by you as an integral part of a qualified manufacturing, agricultural or chemical production, or refining of a qualified product that results in the substantial transformation of the product. A qualified product is any tangible personal property that is not a food or beverage prepared in the same building as a retail establishment in which it is sold.
The construction of which begins after January 19, 2025, and before January 1,

The property is placed in service in the United States or any territory of the United States before January 1, 2031.
The original use of the property must begin with you.

Certain specified plants planted or grafted after January 19, 2025. You can elect to claim a 100% special depreciation allowance for the adjusted basis of certain specified plants (defined later) bearing fruits and nuts planted or grafted after January 19, 2025.

A specified plant is:

Any tree or vine that bears fruits or nuts, and
Any other plant that will have more than one yield of fruits or nuts and generally has a pre-productive period of more than 2 years from planting and grafting to the time it begins bearing fruits or nuts.

Any property planted or grafted outside the United States does not qualify as a specified plant.

See section 168(k)(5) of the Internal Revenue Code.

Note: For the first tax year ending after January 19, 2025, you can elect to take a 40% special depreciation allowance for certain specified plants planted or grafted after January 19, 2025. See chapter 3 of Pub. 946 for information on how to make this election.

Qualified production property. You can elect to take a 100% special depreciation allowance for qualified production property (defined later) placed in service after July 4, 2025. Any portion of nonresidential real property is qualified pro

Exclusions. Qualified production property excludes the portion of any nonresidential real property which is used for:

Offices,
Administrative services,
Lodging,
Parking,
Sales activities,
Research activities,
Software development or engineering activities, or
Other functions unrelated to the manufacturing, production, or refining of tangible personal property.

For more information, see chapter 3 of Pub. 946. Also, see section 168(n) of the Internal Revenue Code.

How Can You Elect Not To Claim the Allowance?

You can elect, for any class of property, not to deduct the special depreciation allowance for all property in such class placed in service during the tax year. To make the election, attach a statement to your return indicating the class of property for which you are making the election.

Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). Attach the election statement to the amended return. On the amended return, write “Filed pursuant to section 301.9100-2.”

Once made, the election may not be revoked without IRS consent.

If you elect not to have the special de-