100% bonus depreciation is back.
The phase down that had been eating into first year cost recovery was reversed for property placed in service after 19 January 2025. Here is what changed, and what it does not change.
3 min readWhat changed.
The 2017 Act set 100% bonus depreciation through 2022 and then stepped it down by twenty points a year. That phase down was well underway and it made the timing of a hardware purchase matter more than it should have.
The One Big Beautiful Bill Act, signed in July 2025, restored the deduction to 100% for qualified property acquired and placed in service after 19 January 2025. The stepped schedule that was running no longer applies to property in that window.
I am deliberately not going to tell you what the schedule looks like at the end of this decade. Depreciation provisions have been changed, sunset, revived and changed again repeatedly, and a confident claim about the 2030s is the kind of thing that quietly becomes wrong. Ask your accountant for the position in the year you are actually placing equipment in service.
How it applies to mining hardware.
The classification
ASIC miners are tangible personal property with a five year MACRS recovery period. They are not listed property and they are not real property, so they fall inside the qualified property definition.
Placed in service controls
The deduction attaches to the year a machine is installed, energised and ready to produce. Not the year you paid for it and not the year it shipped. A unit bought in December and racked in February belongs to the following year.
New and used both qualify
The property has to be new to you and acquired from an unrelated party in an arm’s length transaction. Legitimate secondary market purchases qualify. Buying from a related party does not.
It can create a loss
Unlike section 179, bonus depreciation is not limited to your business taxable income, so it can produce or deepen a loss. Whether that loss is then usable is a separate question with its own set of gates.
Section 179 sits alongside it.
The section 179 expensing limit is $2,560,000 for 2026, with a phase out once total qualifying purchases for the year pass the spending threshold. For deployments at the scale most owners are considering, the cap is not the binding constraint.
The two provisions behave differently in ways that matter. Section 179 is elected per asset and is capped at your taxable income from the active conduct of a trade or business, so it cannot create a loss, and anything disallowed by that limit carries forward. Bonus depreciation applies by class unless you elect out, and it can create a loss.
Where both are available, the usual sequencing is to elect section 179 first and let bonus depreciation take the remaining basis. Which combination is right depends on what else is on your return and on whether a loss is useful to you this year or next, which is your accountant’s call rather than a rule that can be stated in advance.
What it does not change.
This is the part that tends to get lost in the enthusiasm around a change like this, so I want to be plain about it.
A larger first year deduction is not the same as a deduction you can use. Four limits still sit between the two: basis, at risk, the passive activity rules, and the excess business loss limitation. The passive activity rules in particular turn on your level of involvement, and they are the reason a deduction can be perfectly valid and still sit suspended for years. That is set out in the passive activity trap.
It also does not change the underlying economics. Difficulty still rises, machines still reach end of life, and the Bitcoin price still does what it does. A depreciation provision improves the tax treatment of an asset purchase. It does not make a bad purchase good.
The number is still your accountant’s.
You will see this change written up with a worked example ending in a tax saving figure. I am not going to publish one, because the result depends on your bracket, your entity, your state and your involvement, and any figure I put here would be computed for somebody who is not you.
What I can do is make sure the record supports whatever position your accountant takes: purchase invoices and machine serial numbers, energisation dates per unit so the placed in service year is evidenced rather than asserted, and hosting costs by site. On this particular deduction the energisation date is the thing most often missing, and it is the thing the whole timing argument rests on.
Get the timing right before year end.
Thirty minutes on your capital, your timeline and your entity. If a deployment cannot realistically be energised before your year end, I will tell you that rather than take the order. You can also read what is deductible.
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