Certain Qualified Property Acquired and Placed in Service After January 19, 2025

Unless you elect out, you must take a 100% special depreciation allowance for certain qualified property (including long production period property and certain aircraft) acquired and placed in service after January 19, 2025. However, you can elect to take a 40% special depreciation allowance for certain qualified property acquired and placed in service after January 19, 2025 (60% for property with a long production period and certain aircraft), instead of the 100% special depreciation allowance in the first tax year ending after January 19, 2025.

Your property is qualified property if it is 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

Publication 946 (2025) Chapter 3 Claiming a Special Depreciation Allowance 23

production commenced in tax years ending after July 4, 2025.

Qualified property can be either new property or certain used property.

See section 168(k) of the Internal Revenue Code as amended by sections 70301 and 70434(g) of P.L. 119-21.