Summary

Makes three major business tax changes: it permanently restores 100% bonus depreciation for qualified property placed in service after September 27, 2017; creates a GDP‑price‑indexed “neutral cost recovery” adjustment that increases or decreases depreciation deductions for residential rental and nonresidential real property; and restores immediate expensing for research and experimental (R&E) expenditures instead of requiring amortization. The bill includes retroactive and prospective application rules, an irrevocable opt‑out for the real‑property adjustment, limits on how the adjustment affects basis and recapture, and conforming changes to related tax code provisions.

Key Points

• Permanently reinstates 100% bonus depreciation for qualified property placed in service after Sept 27, 2017 (retroactive treatment applied).
• Creates a GDP‑price and time indexed "neutral cost recovery" ratio that scales depreciation for residential and nonresidential real property.
• Taxpayers can irrevocably elect out of the neutral cost recovery adjustment for affected property.
• Additional deductions from the neutral adjustment do not increase property basis and are not treated as depreciation for §§1245/1250 recapture.
• Restores immediate expensing of research and experimental expenditures under IRC §174 (removes the amortization requirement imposed by prior law).
• Conforming changes align AMT, credit, and recapture rules with the new depreciation and R&E treatment.
• The R&E immediate expensing applies to tax years beginning after 12/31/2021; the neutral recovery rule and bonus depreciation have mixed retroactive and prospective application rules.
• Applies targeted definitional and technical changes (plants planting/grafting, recovery‑period limits) to ensure eligibility under the permanent bonus depreciation rule.

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