Senate Blocked Tax Bill With 100% Bonus Depreciation

Tax, SDIRAs & Cost Segregation
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Senate Blocked Tax Bill With 100% Bonus Depreciation

Sean O'KeefePro Member
CPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 871 votes

Yesterday Senate blocked further action on The Tax Relief for American Families and Workers Act of 2024, H.R. 7024, which includes the extension of 100% bonus depreciation. 

Yea-Nay Vote. 48 - 44 record of how Senators voted here -> This tax bill required For Majority: 3/5 and didn't get it. 

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Michael PlaksPro Member
Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
2y

This is a tax forum, not a political forum (thankfully). So my brief side note is only added because Sean's post could be misinterpreted.

It's not like the Senate had a problem with bonus depreciation. The bill failed for other reasons. Which we should not debate here.

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  • Michael PlaksPro Member
    Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
    2y

    This is a tax forum, not a political forum (thankfully). So my brief side note is only added because Sean's post could be misinterpreted.

    It's not like the Senate had a problem with bonus depreciation. The bill failed for other reasons. Which we should not debate here.

    4Reply
  • Sean O'KeefePro Member
    OP
    CPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 871 votes
    2y
    Quote from @Michael Plaks:

    This is a tax forum, not a political forum (thankfully). So my brief side note is only added because Sean's post could be misinterpreted.

    It's not like the Senate had a problem with bonus depreciation. The bill failed for other reasons. Which we should not debate here.

    The tax bill that would extend 100% bonus depreciation failed. If you’re curious why - talk to @Michael Plaks :) 

    if you want a creditable source on Congress.gov that proves this - read my post.

    [email protected]628-241-0888
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  • Joshua ThompsonBusiness Member
    Accountant · Melissa, TX (Remote) · Member since 2017 · 210 posts · 135 votes
    2y

    Hey Sean, thank you for posting this! I think many people have heard lately that an extension has been in talks but haven't heard an update. This is a great update! Fingers crossed for retroactive application lol

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  • Michael PlaksPro Member
    Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
    2y
    Quote from @Joshua Thompson:

    Fingers crossed for retroactive application lol

    I would uncross my fingers if I were you. I believe the idea is dead. In fact, it would be a huge mess to apply it retroactively now, after half of 2023 tax returns have been prepared and filed. But who knows, politicians are even less predictable than Texas weather.
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  • Joshua ThompsonBusiness Member
    Accountant · Melissa, TX (Remote) · Member since 2017 · 210 posts · 135 votes
    2y
    Quote from @Michael Plaks:
    Quote from @Joshua Thompson:

    Fingers crossed for retroactive application lol

    I would uncross my fingers if I were you. I believe the idea is dead. In fact, it would be a huge mess to apply it retroactively now, after half of 2023 tax returns have been prepared and filed. But who knows, politicians are even less predictable than Texas weather.

     I disagree here. A retroactive application yes would be more work for us but it could make a huge difference for many people. I wouldn't say it's dead, too many other bills they can squeeze it into.

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  • Benjamin WeinhartBusiness Member
    Accountant · Cincinnati OH 45245, USA · Member since 2022 · 112 posts · 112 votes
    2y

    At this point, I could easily see 100% bonus being codified on an ongoing basis as part of whatever the 2025 tax bill looks like to take effect for tax year 2026 after TCJA expires. It's an incredibly popular change, so I'd be surprised if we don't see it again.

    As to the retroactive point, it's not happening. We are about a month away from the flow-through deadline and there's no way it can be applied as an automatic adjustment. For a majority of folks it would be designed to help, they've already filed their returns. We as accountants would likely reap a lot in fees from it similar to ERTC/PPP but there's nothing really pressing for it to get pushed through, unlike the pandemic for those programs.

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  • Account Closed
    Accountant · San Diego, CA · Member since 2019 · 1k+ posts · 552 votes
    2y

    Again as @Michael Plaks mentioned this is not a political forum, there is a chance if the Republicans win there could be a tax cuts and jobs act 2. While I don't think you should speculate on politics, there is a chance bonus depreciation at 100% could come back in another form. 

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  • Benjamin WeinhartBusiness Member
    Accountant · Cincinnati OH 45245, USA · Member since 2022 · 112 posts · 112 votes
    2y
    Quote from @Account Closed:

    Again as @Michael Plaks mentioned this is not a political forum, there is a chance if the Republicans win there could be a tax cuts and jobs act 2. While I don't think you should speculate on politics, there is a chance bonus depreciation at 100% could come back in another form. 


     Not really political speculation on my part. I just can't see a world where there isn't some tax change that happens next year to at least make some of the more procedural items of the TCJA permanent + other changes. Regardless of who wins what.

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  • Sean O'KeefePro Member
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    CPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 871 votes
    2y
    Quote from @Joshua Thompson:

    Hey Sean, thank you for posting this! I think many people have heard lately that an extension has been in talks but haven't heard an update. This is a great update! Fingers crossed for retroactive application lol

    @Joshua Thompson totally, I just wanted to update everyone on the status of extending 100% bonus depreciation (since this is also a focus for our clients) and provide a reference to creditable source. 

    [email protected]628-241-0888
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  • Sean O'KeefePro Member
    OP
    CPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 871 votes
    2y

    @Benjamin Weinhart Agreed, likely some of the TCJA items become permanent. Let's see what happens. 

    [email protected]628-241-0888
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  • Landon Mizuguchi
    Member since 2023 · 103 posts · 19 votes
    2y

    This blows up my 2024 and 2025 tax strategy ...

    0Reply
  • Jason MalabuteBusiness Member
    Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 908 votes
    2y

    Actually, I did a cost segregation on a 106-unit property I own, and even though we could only claim 80% of the bonus depreciation last year, it was still a big win for us and our investors. That tax break really made a difference. I really hope they figure out a way to extend this in the future because it’s a huge benefit for real estate investors like us.

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  • Michael PlaksPro Member
    Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
    2y
    Quote from @Jason Malabute:

     I really hope they figure out a way to extend this in the future because it’s a huge benefit for real estate investors like us.

    This is not how the government works though :)
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