Section 70307 of OBBBA, added new section 168(n), which allows taxpayers a 100 percent additional first-year depreciation deduction for qualified production property placed in service after July 4, 2025, and before January 1, 2031. Qualified production property is defined as that portion of any nonresidential real property: (a) to which section 168 applies, (b) which is used by the taxpayer as an integral part of a qualified production activity, (c) which is placed in service in the United States or any possession of the United States, (d) the original use of which commences with the taxpayer, (e) the construction of which begins after January 19, 2025, and before January 1, 2029, (f) which is designated by the taxpayer in an election under section 168(n), and (g) which is placed in service before January 1, 2031. A qualified production activity is the manufacturing, production, or refining of a qualified product which results in a substantial transformation of the property comprising the product.

Regulations will address certain issues involving the definition of qualified production property, the definition of qualified production activity, special rules involving property placed in service and disposed of in the same taxable year, redetermination of basis, like-kind exchanges and involuntary conversions, and depreciation recapture.