Posted by on 07.11.25

The“ One Big Beautiful Bill Act” better known as the Big Beautiful Bill or OBBBA was signed into law on July 4th. While much attention has centered on its game-changing overhaul of R&D amortization rules, there’s more good news for businesses and real estate owners: the bill delivers significant updates for cost segregation, energy incentives, and sustainability focused tax planning.

This new law revives, expands, and secures several major tax incentives; including the complete reversal of the dreaded Section 174 capitalization rules that burdened so many companies since 2022. If you work with businesses investing in R&D, capital assets, or energy efficiency, this bill puts your firm at the center of some of the biggest cash flow planning opportunities in years.

100% Bonus Depreciation Is Now Permanent

One of the headline victories in the Big Beautiful Bill is the restoration of 100% bonus depreciation permanently for qualifying property placed into service after January 19, 2025. Previously, the Tax Cuts and Jobs Act (TCJA) allowed businesses to immediately expense 100% of qualified property costs through 2022, with a phase-down starting in 2023. The OBBBA scraps the phase-down altogether moving forward making full expensing a permanent fixture of the tax code.

Who benefits?

• Real estate investors and developers using cost segregation studies to accelerate depreciation.
• Manufacturers and construction companies buying heavy equipment.
• Any business placing new or used qualified property in service.

A robust cost segregation study can break down building costs into shorter-life assets often allowing owners to write off a large portion of their building’s cost in year one. With 100% bonus depreciation here to stay, the incentive to invest in new construction and renovations is stronger than ever.

Changes to Energy Incentives: Deadlines Ahead

While bonus depreciation is here for the long haul, two key energy-related incentives are not and property owners and developers should take note.

Section 179D - Energy Efficient Commercial Buildings Deduction

• The 179D deduction provides up to $5.81 per square foot for qualifying energy-efficient commercial building improvements.
• Under the Big Beautiful Bill, 179D terminates for properties that begin construction after June 30, 2026.
• If you’re planning an energy-efficient retrofit or new build, now is the time to get projects moving to lock in this benefit.

Section 45L - New Energy Efficient Home Credit

• The 45L credit provides up to $5,000 per home or dwelling unit for qualifying energy-efficient residential construction.
• This benefit terminates for all dwelling units that are closed (sold) or initially leased after June 30, 2026.
• Homebuilders, multifamily developers, and residential construction firms should accelerate projects to maximize this credit before the deadline.

Key Industries That Will Benefit

The combined impact of permanent bonus depreciation and time-sensitive energy incentives will benefit:

• Commercial real estate developers planning office, retail, industrial, and mixed-use projects.
• Multifamily developers aiming to deliver energy-efficient apartments and condos.
• Hospitality and lodging owners investing in renovations or new hotel builds.
• Homebuilders constructing single-family or townhouse communities.
• Manufacturing and distribution firms building or upgrading energy-efficient facilities

The R&D Tax Credit: A Massive Win for Innovation

While the Big Beautiful Bill’s changes to depreciation and energy incentives are big news, the revival of favorable rules for the R&D tax credit is equally critical.

The bill eliminates the unpopular Section 174 amortization requirement, which had forced companies to spread R&D costs over five years instead of expensing them immediately. This change removes a major cash flow obstacle for small and mid-size innovators.

Combined with bonus depreciation and energy incentives, this creates a powerful environment for U.S. companies to:

• Invest more freely in new product development and process improvements.
• Expand clean energy technologies and sustainable construction practices.
• Keep jobs, intellectual property, and capital investment stateside.

Act Now to Maximize These Benefits - Tax Point Advisors is Here to Help

The Big Beautiful Bill offers substantial, immediate tax savings for companies that plan strategically. For commercial and residential developers, it’s critical to line up cost segregation studies and energy design plans now to take full advantage of 100% bonus depreciation and expiring energy incentives before the mid-2026 deadlines.

Meanwhile, all businesses engaged in qualified research and development can finally expense their R&D costs again boosting cash flow and fueling further growth.

At Tax Point Advisors, we’re excited to see this game changing fix for American innovation. Our team is ready to help you and your clients understand exactly how the new OBBBA impacts your specific tax position and the best strategies for 2025, 2026, and beyond.

We’re here to:

• Identify eligible projects,

• Perform high-value R&D studies,

• Navigate the retroactive elections

• And help you secure every dollar your clients deserve

Tax Point Advisors is excited about this new law change and would love to work with you concerning your specific tax position and best strategies for 2025 and beyond. Please feel free to reach out to us to schedule a call at your earliest convenience.

Request a free assessment to determine qualifying R&D tax credit eligibility