On July 1, the Senate released its version of “The One Big Beautiful Bill,” and it includes several major wins for real estate investors, business owners, and developers that could significantly impact your tax strategy.
From restoring 100% bonus depreciation to extending valuable energy-efficiency credits and making Opportunity Zones permanent, the bill brings back powerful incentives that real estate investors, business owners, and developers have been waiting for.
While the bill covers a lot of ground, here’s a quick summary of what matters to you the most:
Some of the Big Wins!
100% Bonus Depreciation is Back
Full first-year deductions for property improvements, FF&E, and land improvements are restored for assets placed in service after January 19, 2025. This puts cost segregation strategies back in the spotlight.
Impact on you:
Restores full first-year deductions for property improvements and reactivates the benefits of cost segregation for real estate investors.
Section 179D Expensing
Allows small businesses to immediately expense the full cost of qualifying equipment or property. The bill raises the expensing cap to $2.5 million, with phaseout starting at $4 million, and includes inflation indexing after 2025.
Impact on you:
Gives long-term real estate investors greater confidence in Opportunity Zones, expands options in rural and distressed areas, and increases the need for detailed reporting and compliance.
Section 179D – Energy-Efficient Commercial Building Deduction - Ending
Offers up to $5.00 per square foot in tax deductions for energy-efficient systems in new or renovated commercial buildings. The bill keeps the incentive in place but only until the end of 2026 after which it officially ends!
Impact on you:
Provides significant tax deductions for large commercial or multifamily projects while promoting energy-efficient building improvements. It also provides a large benefit to designers. Be prepared for this sunsetting incentive!
45L Energy Incentives Remain Strong - Ending
Provides a $2,500–$5,000 per-unit tax credit for developers of energy-efficient single-family and multifamily homes that meet ENERGY STAR or DOE Zero Energy Ready standards. But this tax credit officially ends at the end of 2026.
Impact on you:
Offers substantial tax credits for multifamily developers and green builders, while incentivizing energy-efficient certification and performance but only through 2026.
Immediate Deduction of R&E Expenses Restored (Section 174A)
Reverses the TCJA’s amortization rule by allowing immediate deductions for qualified domestic R&E expenses through 2025. The new §174A restores liquidity for startups, manufacturers, and innovation-driven businesses, while keeping amortization optional for foreign R&D.
Impact on you:
Allows immediate deductions for research activities, helping small businesses and tech innovators maintain stronger cash flow. This is retroactive to December 31, 2024 and confirmed through 2030.
R&D Tax Credit Preserved and Enhanced
Offers a 6–20% credit for increasing qualified research activities. The bill preserves the existing structure and enhances it by allowing both a full deduction and a credit for eligible R&D expenses under the new §174A.
Impact on you:
Startups and small businesses can combine deductions and credits to reduce tax liability and offset payroll taxes if under $5 million in revenue.
Opportunity Zones Made Permanent
Makes the Opportunity Zone program permanent, with added transparency and reporting requirements. Also introduces a new category—Qualified Rural Opportunity Funds—to expand investment options in underserved areas.
Impact on you:
Long-term real estate investors benefit from increased stability in Opportunity Zones, expanded rural development options, and new compliance requirements.
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