Answering Your Questions About One Big Beautiful Bill (OBBB)

If you purchased property last year 12-2024 can you use the remaining aount 100% this year? add remove

• No, to get 100% bonus depreciation, the property needs to be placed in service on or after Jan 19,2025. 2024 PIS properties get 60% bonus depreciation

Does this apply to office/administrative space? add remove

• Yes, all income producting properties that are residential or commercial qualify for cost segregation

(Question asked during R&D section) so less than $31M annually? add remove

• Yes, the qualified small business test for this Bill’s purpose is: less than $31M in average gross receipts from tax years 2022 – 2024.

Can you amend 2022 & 2023 under this law change? add remove

• If the company capitalized R&D costs on initial returns in 2022 – 2023, yes those can absolutely be amended to claim credit and full expensing of R&D.
• Small business criteria must be met (<$31M in average gross receipts from 2022 – 2024) and the deadline to amend to claim full deductions is 7/4/2026.

How does this affect remaining tax credits from 2021 for capitalized R&D costs? add remove

• In tax year 2021, there was no requirement to capitalize R&D costs. If a company chose to do so in tax year 2021, then there is no retroactive correction available to accelerate amortization of those costs. The credit claimed in 2021, if not yet utilized, would have a remaining carryforward period of 15 years to eventually offset income tax due upon filing.

If 2024 return was extended, can we deduct fully R&D expenditure? add remove

• On a timely filed return, no. The Bill states numerous times that retroactive relief for tax years 2022 – 2024 must be done on an amended return. Leyton is awaiting further guidance on whether an initial 2024 return now must include capitalization of R&D costs, or whether it can be filed with no capitalization or credit. In either instance, the 2024 return would then need to be amended to fully deduct R&D costs per the Bill’s language. The alternative is to accelerate all remaining amortization expense on 2025’s return.

If the taxpayer did not file the 2024 tax return, can we claim a 100% deduction at the time of filing the return? add remove

• On a timely filed return, no. The Bill states numerous times that retroactive relief for tax years 2022 – 2024 must be done on an amended return.
• Leyton is awaiting further guidance on whether an initial 2024 return now must include capitalization of R&D costs, or whether it can be filed with no capitalization or credit. In either instance, the 2024 return would then need to be amended to fully deduct R&D costs per the Bill’s language. The alternative is to accelerate all remaining amortization expense on 2025’s return.

For the Small Business Retroactive Relief – what if the business is claiming the credit for the first time? How would they qualify to be Small Business? add remove

• The qualified small business test for this Bill’s purpose is: less than $31M in average gross receipts from tax years 2022 – 2024.
• Leyton is awaiting further guidance on whether originally filed returns had to have capitalized R&D costs to allow for amended claims with the R&D credit and full deductions. Our expectation is that any company – regardless of whether costs were capitalized or the credit was claimed in 2022 – 2024 – can amend returns to take full advantage of the credit and deductions.

If the 2024 tax return is not yet filed, can we claim the full deduction for 2024 on the original tax return? add remove

• On a timely filed return, no. The Bill states numerous times that retroactive relief for tax years 2022 – 2024 must be done on an amended return.
• Leyton is awaiting further guidance on whether an initial 2024 return now must include capitalization of R&D costs, or whether it can be filed with no capitalization or credit. In either instance, the 2024 return would then need to be amended to fully deduct R&D costs per the Bill’s language. The alternative is to accelerate all remaining amortization expense on 2025’s return.