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Tax changes: Shorter depreciation for real estate and inflation-adjusted cost recovery.

This Act shortens the depreciation period for nonresidential and residential rental properties to 20 years. It also introduces a new 'Neutral Cost Recovery' mechanism that adjusts annual depreciation deductions based on inflation and a fixed rate. These properties will no longer qualify for bonus depreciation.
Key points
The depreciation period for nonresidential real property and residential rental property is set to 20 years.
A 'Neutral Cost Recovery' mechanism is introduced, adjusting annual depreciation deductions based on the Gross Domestic Product Deflator (inflation) and a 3% fixed rate.
Nonresidential real property and residential rental property will no longer qualify for 'bonus depreciation'.
The depreciation period change applies to property placed in service after the enactment date, while the cost recovery adjustment applies to taxable years ending after the enactment date.
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Additional Information
Print number: 118_HR_9069
Sponsor: Rep. Hern, Kevin [R-OK-1]
Process start date: 2024-07-18
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OFFICIAL LEGAL TITLE

Renewing Investment in American Workers and Supply Chains Act

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 118_HR_9069.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2024-07-18.

What are the main provisions?

Key points include:

  • The depreciation period for nonresidential real property and residential rental property is set to 20 years.
  • A 'Neutral Cost Recovery' mechanism is introduced, adjusting annual depreciation deductions based on the Gross Domestic Product Deflator (inflation) and a 3% fixed rate.
  • Nonresidential real property and residential rental property will no longer qualify for 'bonus depreciation'.
  • The depreciation period change applies to property placed in service after the enactment date, while the cost recovery adjustment applies to taxable years ending after the enactment date.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Hern, Kevin [R-OK-1].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-30.

CATEGORIES

Taxes Real Estate Economy