On Jan. 14, the Treasury Department and the IRS released Notice 2026‑11 (Notice), offering interim guidance on claiming bonus depreciation under Section 168(k), as updated by the One Big Beautiful Bill Act (OBBB). The IRS plans to issue proposed regulations that are expected to be consistent with this interim guidance. Until those regulations are released, taxpayers may generally rely on the Notice.

The OBBB permanently reinstates 100% bonus depreciation for qualified property acquired and placed in service after Jan. 19, 2025. The Notice aims to help taxpayers determine whether property meets the criteria for bonus depreciation and how to calculate the appropriate deduction.

Acquisition date rules

The Notice confirms that the provisions in Treas. Reg. Section 1.168(k)-2 continue to apply when determining the acquisition date of property, substituting Jan. 19, 2025 for the prior reference date. Under these rules:

• Property is not considered acquired after the date a written binding contract is executed.
• For property purchased under a written binding contract, the acquisition date is the latest of:

1. The date the contract is entered into;
2. The date it becomes enforceable under state law;
3. The end of all cancellation periods; or
4. The satisfaction of all conditions tied to cancellation clauses.

The Notice also clarifies that property manufactured or constructed for a taxpayer by another party may be treated as self‑constructed property if the property is intended for use in the taxpayer’s business. In these cases, the acquisition date is when the taxpayer begins construction or manufacturing. A safe harbor allows taxpayers to deem construction as having begun once 10% of total project costs have been incurred.

Additional guidance

The Notice provides updates on several elections, including:

• Reduced bonus election (168(k)(10)) – Taxpayers may elect to claim 40% bonus depreciation for their first tax year ending after Jan. 19, 2025.
• Specified plants (168(k)(5)) – Existing procedures continue to apply for specified plants, such as fruit‑bearing plants, with only the effective date updated.
• Sound recording productions – New guidance outlines when sound recordings qualify for bonus depreciation:
  • A production is considered acquired when principal recording begins.
  • It is placed in service upon first release or broadcast.
  • Productions acquired after Jan. 19, 2025, in tax years ending after July 4, 2025, automatically qualify.
  • Taxpayers may opt out of claiming bonus depreciation for these assets.

What does CohnReznick think?

The interim guidance in Notice 2026‑11 provides clarification for taxpayers working with the revived 100% bonus depreciation rules. We recommend that taxpayers review acquisition contracts and documentation, reevaluate fixed‑asset classifications, assess whether alternative bonus‑rate elections may be beneficial, and confirm proper treatment of unique assets such as self‑constructed property and sound recordings.