What is Qualified production property?
Qualified production property refers to nonresidential real property used directly in the manufacturing, production, or refining of tangible personal property, eligible for a 100% immediate depreciation deduction under the One Big Beautiful Bill Act. To qualify, property construction must commence after January 19, 2025, and before January 1, 2029, be placed in service before January 1, 2031, and be located in the United States or a U.S. possession. The property must generally be new to the taxpayer (with original use beginning with the taxpayer, subject to limited exceptions) and used in activities involving substantial transformation of raw materials into finished goods, such as automobile manufacturing, chemical refining, or pharmaceutical production. Excluded property includes office spaces, administrative facilities, and operations unrelated to direct manufacturing. A ten‑year recapture provision applies if the property ceases to be used in a qualified production activity within 10 years of being placed in service, which can trigger ordinary‑income recapture of previously claimed deductions. Strategic coordination with Depreciation and amortization planning maximizes manufacturing tax benefits while supporting domestic production expansion.
.png){kind=small}