{"id":2025,"date":"2025-10-06T11:30:49","date_gmt":"2025-10-06T11:30:49","guid":{"rendered":"https:\/\/www.cpapilot.com\/blog\/?p=2025"},"modified":"2025-10-30T10:58:36","modified_gmt":"2025-10-30T10:58:36","slug":"obbba-chapter-3","status":"publish","type":"post","link":"https:\/\/www.cpapilot.com\/blog\/obbba-chapter-3\/","title":{"rendered":"OBBBA Chapter 3 \u2014 Business &amp; International Tax Changes (Sections 70301\u201370354)"},"content":{"rendered":"\n<p>Chapter 3 of <a href=\"https:\/\/en.wikipedia.org\/wiki\/One_Big_Beautiful_Bill_Act\" target=\"_blank\" rel=\"noopener\">One Big Beautiful Bill Act (OBBBA)<\/a> (Sections <strong>70301\u201370354<\/strong>) changes deductions, credits, interest limits, and international rules in ways that are easy to miss under deadline pressure. This page turns the law into <strong>timing checklists<\/strong>, <strong>election choices<\/strong>, and <strong>workpapers<\/strong> you can ship.<\/p>\n\n\n\n<div class=\"wp-block-group has-pale-cyan-blue-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<h3 class=\"wp-block-heading\"><strong>TL;DR &#8211; OBBBA Chapter 3  <\/strong><\/h3>\n\n\n\n<div class=\"wp-block-group has-pale-cyan-blue-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<ul class=\"wp-block-list\">\n<li><strong>\u00a7168(k) 100% bonus<\/strong> is <strong>permanent<\/strong> for qualified property <strong>placed in service after Jan 19, 2025<\/strong>.<\/li>\n\n\n\n<li><strong>\u00a7179<\/strong> limit <strong>$2.5M<\/strong> (phase-out from <strong>$4M<\/strong>), for property <strong>in service after Dec 31, 2024<\/strong>.<\/li>\n\n\n\n<li><strong>\u00a7174A<\/strong>: <strong>Immediate expensing of domestic R&amp;D<\/strong> (amounts <strong>after Dec 31, 2025<\/strong>).<\/li>\n\n\n\n<li><strong>\u00a7168(n)<\/strong>: New <strong>100% deduction<\/strong> for qualified U.S. advanced-manufacturing builds (timing windows apply).<\/li>\n\n\n\n<li><strong>\u00a7163(j)<\/strong>: Permanent add-back to <strong>ATI<\/strong> + disallowed interest <strong>not capitalized<\/strong> (TYs <strong>after 12\/31\/2024<\/strong>).<\/li>\n\n\n\n<li><strong>\u00a748D<\/strong>: Advanced manufacturing credit <strong>35%<\/strong>; site\/infrastructure included; <strong>transfer\/direct pay<\/strong> options.<\/li>\n\n\n\n<li><strong>International<\/strong>: Simplified FTC baskets, <strong>FDEI\/NCTI<\/strong> (\u00a7250) with <strong>QBAI 5%<\/strong>, <strong>CFC look-through permanent<\/strong>, <strong>day-count<\/strong> inclusions, repeal of one-month deferral, restored downward attribution, new \u00a7951B.<\/li>\n<\/ul>\n<\/div><\/div>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>The pain you\u2019re dealing with<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Timing pressure:<\/strong> Getting assets \u201cplaced in service\u201d on the right side of <strong>Jan 19, 2025<\/strong> for <strong>100% bonus<\/strong> while clients keep moving install dates.<\/li>\n\n\n\n<li><strong>Choice overload:<\/strong> Balancing <strong><a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/179\" target=\"_blank\" rel=\"noopener\">\u00a7179<\/a> ($2.5M\/$4M)<\/strong> vs <strong>bonus<\/strong> vs <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/168\" target=\"_blank\" rel=\"noopener\"><strong>\u00a7168(n)<\/strong> <\/a>without tripping basis reductions or state non-conformity.<\/li>\n\n\n\n<li><strong>R&amp;D whiplash:<\/strong> Re-wiring ledgers for <strong><a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/174A\" target=\"_blank\" rel=\"noopener\">\u00a7174A<\/a> domestic expenses after 12\/31\/2025<\/strong>, coordinating with <strong>\u00a741<\/strong> so nothing double counts.<\/li>\n\n\n\n<li><strong>Interest math drift:<\/strong> Rebuilding <strong>\u00a7163(j)<\/strong> with a <strong>permanent add-back<\/strong> and new <strong>\u201cdon\u2019t capitalize disallowed\u201d<\/strong> ordering.<\/li>\n\n\n\n<li><strong>Documentation burden:<\/strong> Drafting clean <strong>election statements<\/strong>, policy addenda, and client memos that reviewers will actually sign off on.<\/li>\n\n\n\n<li><strong>International remap:<\/strong> Collapsing FTC baskets, recalculating <strong><a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/250\" target=\"_blank\" rel=\"noopener\">\u00a7250<\/a> (FDEI\/NCTI)<\/strong> with <strong>QBAI = 5%<\/strong>, tracking <strong>day-count<\/strong> CFC inclusions, and explaining it all to finance.<\/li>\n\n\n\n<li><strong>Client comms:<\/strong> Sending short, accurate emails that convert decisions into action\u2014without a 20-page memo every time.<\/li>\n\n\n\n<li><strong>Team ramp-up:<\/strong> Getting juniors productive on new rules before the next filing wave hits.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How can CPA Pilot help with this change?<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Generate <strong>election statements<\/strong>, <strong>client emails<\/strong>, and <strong>workpapers<\/strong> in minutes.<\/li>\n\n\n\n<li>Run <strong>bonus vs \u00a7179 vs \u00a7168(n)<\/strong> comparisons and <strong>\u00a7163(j)<\/strong> calculators with audit-friendly outputs.<\/li>\n\n\n\n<li>Build <strong>\u00a7250\/FTC\/CFC<\/strong> worksheets (including <strong>day-count<\/strong>) without reinventing the model each time.<\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\"><\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Quick-Start Checklist<\/strong><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Time capex for 100% bonus: <\/strong>Assets \u201cready and available for use\u201d <strong>after Jan 19, 2025<\/strong>. Consider the one-year <strong>40%\/60%<\/strong> election if smoothing income helps.<\/li>\n\n\n\n<li><strong>Update \u00a7179 policy: <\/strong>Use <strong>$2.5M \/ $4M<\/strong> and model state conformity.<\/li>\n\n\n\n<li><strong>Stack advanced manufacturing (\u00a7168(n) + \u00a748D): <\/strong>Confirm construction windows, split qualifying vs non-qualifying areas, and model <strong>deduction-first vs credit-first<\/strong>.<\/li>\n\n\n\n<li><strong>Stand up domestic R&amp;D expensing (\u00a7174A): <\/strong>Tag \u201cdomestic\u201d costs; choose <strong>expense now<\/strong> vs <strong>amortize \u226560 months<\/strong>; coordinate with <strong>\u00a741<\/strong>.<\/li>\n\n\n\n<li><strong>Rebuild \u00a7163(j): <\/strong>Permanent add-back to <strong>ATI<\/strong>, apply \u201ccapitalize allowed first; <strong>don\u2019t<\/strong> capitalize disallowed.\u201d<\/li>\n\n\n\n<li><strong>Meals exception (remote fishing): <\/strong>Add a separate GL if relevant; capture location evidence.<\/li>\n\n\n\n<li><strong>International reset: <\/strong>Two FTC baskets, <strong>\u00a7250<\/strong> updates (FDEI\/NCTI, <strong>QBAI 5%<\/strong>, direct-expense rule), CFC <strong>day-count<\/strong> tracking, \u00a7951B exposure.<\/li>\n\n\n\n<li><strong>One-month deferral repeal: <\/strong>Calendars aligned; first post-repeal year ends <strong>Nov 30, 2025<\/strong>.<\/li>\n\n\n\n<li><strong>Client comms: <\/strong>Send three quick emails: <strong>Capex timing<\/strong>, <strong>R&amp;D expensing<\/strong>, <strong>International changes<\/strong>.<\/li>\n\n\n\n<li><strong>Documentation kit: <\/strong>Elections, placed-in-service proof, \u00a7163(j) workbook, \u00a7250\/FTC mapping, CFC day-count log.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Changed (One-screen map)<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>70301 \u2014 \u00a7168(k) 100% bonus:<\/strong> Permanent; <strong>in service after Jan 19, 2025<\/strong>; one-year <strong>40%\/60%<\/strong> option.<\/li>\n\n\n\n<li><strong>70302 \u2014 \u00a7174A domestic R&amp;D:<\/strong> Expense now; <strong>amounts after Dec 31, 2025<\/strong>; software included.<\/li>\n\n\n\n<li><strong>70303 \u2014 \u00a7163(j):<\/strong> Add-back permanent; floor-plan widened; <strong>TYs after 12\/31\/2024<\/strong>.<\/li>\n\n\n\n<li><strong>70304 \u2014 \u00a745S FML credit:<\/strong> Base = <strong>wages or premiums<\/strong>; permanent <strong>TYs after 12\/31\/2025<\/strong>.<\/li>\n\n\n\n<li><strong>70305 \u2014 \u00a7274 meals (remote fishing):<\/strong> Narrow 100% exception <strong>after 12\/31\/2025<\/strong>.<\/li>\n\n\n\n<li><strong>70306 \u2014 \u00a7179:<\/strong> <strong>$2.5M<\/strong> limit; <strong>$4M<\/strong> phase-out; <strong>in service after 12\/31\/2024<\/strong>.<\/li>\n\n\n\n<li><strong>70307 \u2014 \u00a7168(n):<\/strong> 100% for U.S. advanced-manufacturing property; timing windows; basis reduction, no recapture.<\/li>\n\n\n\n<li><strong>70308 \u2014 \u00a748D:<\/strong> <strong>35%<\/strong> credit; site\/infrastructure; transfer\/direct pay; <strong>in service after 12\/31\/2025<\/strong>.<\/li>\n\n\n\n<li><strong>70309 \u2014 \u00a7142 spaceports:<\/strong> Tax-exempt bonds <strong>after 12\/31\/2024<\/strong>.<\/li>\n\n\n\n<li><strong>70311\u201370313:<\/strong> FTC simplification; deemed-paid 90%; up to <strong>50%<\/strong> foreign-source on U.S.-made inventory via branches.<\/li>\n\n\n\n<li><strong>70321\u201370323:<\/strong> FDII\/GILTI \u2192 <strong>FDEI\/NCTI<\/strong>; \u00a7250 = <strong>33.34%\/40%<\/strong>; <strong>QBAI 5%<\/strong>; scope expands.<\/li>\n\n\n\n<li><strong>70331 \u2014 \u00a759A BEAT \u2192 BEMT:<\/strong> <strong>10.5%<\/strong> (post-2024); <strong>12.5%<\/strong> (post-2026); more credits; COGS relief.<\/li>\n\n\n\n<li><strong>70341\u201370342:<\/strong> Disallowed interest <strong>not capitalized<\/strong>; ATI excludes \u00a7\u00a7951\/951A\/78 + related \u00a7245A\/\u00a7250.<\/li>\n\n\n\n<li><strong>70351\u201370354:<\/strong> CFC look-through permanent; one-month deferral repealed; downward attribution restored + \u00a7951B; day-count inclusions.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>U.S. Business Provisions (70301\u201370309)<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770301 \u2014 100% Bonus Depreciation (IRC \u00a7168(k))<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> 100% bonus is <strong>permanent<\/strong> for qualified property <strong>placed in service after Jan 19, 2025<\/strong>.<br><strong>Notes:<\/strong> \u226420-year MACRS, off-the-shelf software, some film\/TV, certain used property; special plants (1\/19\/2025\u201312\/31\/2026); one-year <strong>40%\/60%<\/strong> option.<br><strong>Plan:<\/strong> Time installs; compare with <strong>\u00a7179<\/strong> and <strong>\u00a7168(n)<\/strong>; consider smoothing with 40\/60.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770302 \u2014 Immediate Expensing for Domestic R&amp;D (New \u00a7174A)<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Expense <strong>domestic<\/strong> R&amp;D (software included) <strong>after Dec 31, 2025<\/strong> or amortize \u226560 months.<br><strong>Plan:<\/strong> Tag domestic costs; coordinate with <strong>\u00a741<\/strong>; document the annual election.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770303 \u2014 Business-Interest Limitation (IRC \u00a7163(j))<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Add-back of depreciation\/amortization to <strong>ATI<\/strong> is <strong>permanent<\/strong> (TYs <strong>after 12\/31\/2024<\/strong>). Floor-plan widened to some towable RV inventory.<br><strong>Plan:<\/strong> Rebuild model; check floor-plan eligibility; see coordination in <a href=\"https:\/\/www.irs.gov\/newsroom\/basic-questions-and-answers-about-the-limitation-on-the-deduction-for-business-interest-expense\" target=\"_blank\" rel=\"noopener\">\u00a7163(j) workflow<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770304 \u2014 Employer Credit for Paid Family &amp; Medical Leave (IRC \u00a745S)<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> <strong>Permanent<\/strong>; credit can be based on <strong>wages<\/strong> <strong>or<\/strong> <strong>insurance premiums<\/strong> (TYs <strong>after 12\/31\/2025<\/strong>).<br><strong>Plan:<\/strong> Model wage- vs premium-based; update policy; avoid \u00a7280C double dip.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770305 \u2014 Business Meals: Remote-Fishing Exception (IRC \u00a7274)<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Narrow 100% meals for specified vessels\/facilities <strong>north of 50\u00b0 N<\/strong> and outside MSAs <strong>after 12\/31\/2025<\/strong>.<br><strong>Plan:<\/strong> Separate GL; capture location evidence.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770306 \u2014 Higher \u00a7179 Expensing (IRC \u00a7179)<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> <strong>$2.5M<\/strong> max; <strong>$4M<\/strong> phase-out; indexed from 2024; <strong>in service after 12\/31\/2024<\/strong>.<br><strong>Plan:<\/strong> Model \u00a7179 vs bonus vs \u00a7168(n); watch state conformity.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770307 \u2014 Special 100% Deduction for U.S. Production (New \u00a7168(n))<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Elect <strong>100%<\/strong> deduction for qualified advanced-manufacturing property. Construction <strong>after 1\/19\/2025<\/strong> and <strong>before 12\/31\/2028<\/strong>; in service by <strong>1\/1\/2031<\/strong>.<br><strong>Plan:<\/strong> Cost-seg to isolate qualifying areas; stack with <strong>\u00a748D<\/strong>; basis reduction, no recapture.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770308 \u2014 Advanced Manufacturing Investment Credit (IRC \u00a748D)<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> <strong>35%<\/strong> credit; includes site\/infrastructure; <strong>transfer\/direct pay<\/strong>; <strong>in service after 12\/31\/2025<\/strong>.<br><strong>Plan:<\/strong> Compare deduction-first vs credit-first; consider selling the credit.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770309 \u2014 Spaceports in Exempt Facility Bonds (IRC \u00a7142)<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Spaceports can use <strong>tax-exempt bonds<\/strong> (bonds <strong>after 12\/31\/2024<\/strong>).<br><strong>Plan:<\/strong> Explore muni financing options and lease structuring.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-16018d1d wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-black-color has-luminous-vivid-amber-background-color has-text-color has-background has-link-color wp-element-button\" href=\"https:\/\/www.cpapilot.com\/cpa-pilot-demo\/\">Book a 5-minute demo <\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>International Provisions (70311\u201370354)<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770311 \u2014 FTC Limitation Adjustments (IRC \u00a7904)<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Only <strong>passive<\/strong> and <strong>general<\/strong> baskets remain; \u00a7250 deductions and related foreign taxes \u2192 <strong>general<\/strong>. <strong>TYs after 12\/31\/2025<\/strong>.<br><strong>Plan:<\/strong> Remap baskets; rebuild FTC capacity.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770312 \u2014 Deemed-Paid Credit for CFC Tested Income (IRC \u00a7\u00a7960 &amp; 78)<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Deemed-paid credit <strong>90%<\/strong> (was 80%); conforming \u00a778 gross-up; <strong>CFC TYs after 12\/31\/2025<\/strong>.<br><strong>Plan:<\/strong> Recompute NCTI effective rates.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770313 \u2014 Sourcing for U.S.-Produced Inventory (New \u00a7904(b)(6))<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Up to <strong>50%<\/strong> of income can be <strong>foreign-source<\/strong> if U.S.-produced inventory is sold abroad via a <strong>foreign branch<\/strong>; <strong>TYs after 12\/31\/2025<\/strong>.<br><strong>Plan:<\/strong> Document production\/location; expand FTC capacity.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a7\u00a770321\u201370323 \u2014 FDII\/GILTI \u2192 FDEI\/NCTI; \u00a7250 Mechanics<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> <strong>FDEI\/NCTI<\/strong> names; \u00a7250 deductions <strong>33.34%\/40%<\/strong>; <strong>QBAI 5%<\/strong>; scope includes depreciable\/intangible property and \u00a7367(d) deemed sales.<br><strong>Timing:<\/strong> Property-sale scope <strong>on\/after 6\/16\/2025<\/strong>; other \u00a7250 changes <strong>TYs after 12\/31\/2025<\/strong>.<br><strong>Plan:<\/strong> Refresh \u00a7250 worksheets; tag <strong>direct expenses<\/strong> only (non-interest, non-R&amp;E).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770331 \u2014 BEAT \u2192 BEMT (IRC \u00a759A)<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Renamed; <strong>10.5%<\/strong> (post-2024) and <strong>12.5%<\/strong> (post-2026); more credits may offset; certain low-margin COGS excluded.<br><strong>Plan:<\/strong> Re-run models; map credit stacking.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a7\u00a770341\u201370342 \u2014 \u00a7163(j) Coordination &amp; ATI Clarification<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Disallowed interest <strong>not capitalized<\/strong> under \u00a7263A; ATI excludes \u00a7\u00a7951, 951A (NCTI), 78 and related \u00a7245A\/\u00a7250 deductions; <strong>TYs after 12\/31\/2024<\/strong>.<br><strong>Plan:<\/strong> Update UNICAP and ATI workpapers.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770351 \u2014 Permanent CFC Look-Through<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> \u00a7954(c)(6) made <strong>permanent<\/strong>.<br><strong>Plan:<\/strong> Stabilize intercompany financing\/licensing with substance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770352 \u2014 Repeal of One-Month Deferral (IRC \u00a7898)<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Election repealed; first post-repeal year ends <strong>Nov 30, 2025<\/strong>.<br><strong>Plan:<\/strong> Adjust calendars; plan short-year allocations.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770353 \u2014 Downward Attribution Restored; New \u00a7951B<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Restores \u00a7958(b)(4); adds <strong>\u00a7951B<\/strong> for foreign-controlled U.S. shareholders of foreign-controlled CFCs.<br><strong>Plan:<\/strong> Ownership diagnostics; inclusion planning.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a770354 \u2014 Day-Count Pro-Rata; \u00a7956 Timing (IRC \u00a7951(a))<\/strong><\/h3>\n\n\n\n<p><strong>Answer:<\/strong> Include subpart F\/NCTI by <strong>days owned<\/strong>; \u00a7956 requires ownership on the <strong>last CFC day<\/strong>; Treasury can force year-end close on certain transfers.<br><strong>Plan:<\/strong> Track daily ownership; control intra-year transfers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>OBBBA 2025: Side-by-Side Comparison of Old vs New Tax Rules<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-pale-cyan-blue-background-color has-background has-fixed-layout\"><thead><tr><th>Provision<\/th><th>Before OBBBA (Old Law)<\/th><th>After OBBBA (New Act)<\/th><th>Impact<\/th><\/tr><\/thead><tbody><tr><td><a href=\"https:\/\/www.cpapilot.com\/blog\/qualified-business-income-qbi-deduction\/\" data-type=\"post\" data-id=\"2140\">Qualified Business Income Deduction (QBI)<\/a><\/td><td>20% deduction available through 2025; set to expire in 2026.<\/td><td>QBI deduction made permanent at 20% .<\/td><td>Sustained tax relief for pass-through businesses.<\/td><\/tr><tr><td><a href=\"https:\/\/www.cpapilot.com\/blog\/bonus-depreciation\/\" data-type=\"post\" data-id=\"2149\">Bonus Depreciation<\/a><\/td><td>40% in 2025, scheduled to reduce to 20% in 2026 and then eliminate by 2027.<\/td><td>100% bonus depreciation for property placed in service after Jan 19, 2025, made permanent .<\/td><td>Accelerates tax benefits for investment.<\/td><\/tr><tr><td>Section 179 Expensing<\/td><td>$1.25M max, phase-out at $3.13M (2025 figures).<\/td><td>Raised to $2.5M max, phase-out at $4M, indexed for inflation .<\/td><td>Greater immediate expensing for capital purchases.<\/td><\/tr><tr><td>Standard Deduction<\/td><td>2025: $15,000 (Single), $30,000 (Married Joint), indexed up.<\/td><td>2025+: $15,750 (Single), $31,500 (Married Joint), indexed for inflation .<\/td><td>Slightly higher, with inflation adjustments.<\/td><\/tr><tr><td>Tax Brackets<\/td><td>TCJA rates (10%, 12%, 22%, 24%, 32%, 35%, 37%) ending after 2025.<\/td><td>Permanent TCJA brackets, expanded 10% bracket .<\/td><td>More income taxed at lower rates.<\/td><\/tr><tr><td>International Tax\u2013Section 250\/FDII\/GILTI<\/td><td>More restrictive deductions and higher effective tax rates on overseas income.<\/td><td>Deductions and rates restructured for lower effective rates; FTC baskets simplified .<\/td><td>Reduces corporate tax burdens internationally.<\/td><\/tr><tr><td><a href=\"https:\/\/www.cpapilot.com\/blog\/salt-deduction-explained\/\" data-type=\"post\" data-id=\"2125\">SALT Deduction<\/a><\/td><td>$10,000 cap.<\/td><td>Increased to $40,000 (2026\u201329) .<\/td><td>Higher itemized deduction for state\/local taxes.<\/td><\/tr><tr><td>Advanced Manufacturing Deductions\/Credits<\/td><td>No special provision.<\/td><td>New 100% deduction (\u00a7168(n)) and 35% credit (\u00a748D) for qualifying property .<\/td><td>Boost for manufacturing investment.<\/td><\/tr><tr><td>Estate\/Wealth Transfer<\/td><td>Estate\/gift exemption scheduled to shrink after 2025.<\/td><td>OBBBA reverses reduction; higher exemptions continue .<\/td><td>Better planning for wealth transfer.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Implementation Playbook (How-To)<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Fixed Assets &amp; Elections (Bonus vs \u00a7179 vs \u00a7168(n))<\/strong><\/h3>\n\n\n\n<p><strong>Goal:<\/strong> Max year-1 deduction without state\/FS surprises.<br><strong>Steps:<\/strong> Tag placed-in-service; run three columns (bonus \/ \u00a7179 \/ \u00a7168(n)); choose mix; consider <strong>40%\/60%<\/strong> transitional option; generate elections &amp; policy addendum.<br><strong>Outputs:<\/strong> Election PDFs, side-by-side schedule, updated policy.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>\u00a7163(j) Interest Limitation (Permanent Add-Back + Non-Capitalization)<\/strong><\/h3>\n\n\n\n<p><strong>Goal:<\/strong> Increase deductible interest; avoid trapping in inventory.<br><strong>Steps:<\/strong> Recompute ATI; capitalize <strong>allowed<\/strong> interest first; <strong>don\u2019t<\/strong> capitalize disallowed; check floor-plan; export carryforwards.<br><strong>Outputs:<\/strong> \u00a7163(j) workbook, carryforward roll, capitalization memo.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Domestic R&amp;D Playbook (\u00a7174A + \u00a741)<\/strong><\/h3>\n\n\n\n<p><strong>Goal:<\/strong> Expense domestic R&amp;D and keep \u00a741 clean.<br><strong>Steps:<\/strong> Tag domestic vs foreign; decide expense vs amortize; reconcile \u00a7174A to \u00a741; update book-tax timing.<br><strong>Outputs:<\/strong> \u00a7174A election memo; reconciled \u00a741 binder; R&amp;D schedule.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Advanced Manufacturing Stack (\u00a7168(n) + \u00a748D 35%)<\/strong><\/h3>\n\n\n\n<p><strong>Goal:<\/strong> Pair a 100% deduction with a 35% credit\u2014smartly.<br><strong>Steps:<\/strong> Map qualifying areas; validate timing windows; model deduction-first vs credit-first; decide to transfer credit or retain; finalize elections.<br><strong>Outputs:<\/strong> Allocation map; model; transfer\/retention memo; support packet.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>International Reset (FTC, \u00a7250 FDEI\/NCTI, CFC Timing)<\/strong><\/h3>\n\n\n\n<p><strong>Goal:<\/strong> Align sourcing, baskets, \u00a7250 math; prevent timing misses.<br><strong>Steps:<\/strong> Two baskets only; refresh \u00a7250 with <strong>33.34%\/40%<\/strong> and <strong>QBAI 5%<\/strong>; up to <strong>50%<\/strong> foreign-source for U.S.-made inventory via branches; add CFC <strong>day-count<\/strong> tracking; assess \u00a7951B.<br><strong>Outputs:<\/strong> Updated FTC\/\u00a7250 workbook; sourcing memo; ownership\/day-count logs<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>OBBBA Chapter 3 FAQs<\/strong><\/h2>\n\n\n\n<p><strong>Is the 100% bonus permanent now?<\/strong><strong><br><\/strong>Yes\u2014for qualified property <strong>placed in service after Jan 19, 2025<\/strong>.<\/p>\n\n\n\n<p><strong>When can I expense domestic R&amp;D?<\/strong><strong><br><\/strong>For <strong>amounts after Dec 31, 2025<\/strong> under <strong>\u00a7174A<\/strong> (domestic only).<\/p>\n\n\n\n<p><strong>Does \u00a7163(j) still add back depreciation\/amortization to ATI?<\/strong><strong><br><\/strong>Yes\u2014<strong>permanently<\/strong> for <strong>tax years after 12\/31\/2024<\/strong>.<\/p>\n\n\n\n<p><strong>What are the new \u00a7179 limits?<\/strong><strong><br><\/strong><strong>$2.5M<\/strong> limit; phase-out begins at <strong>$4M<\/strong>; indexed from <strong>2024<\/strong>.<\/p>\n\n\n\n<p><strong>What is \u00a7168(n)?<\/strong><strong><br><\/strong>A new <strong>100%<\/strong> deduction for qualified <strong>U.S. advanced-manufacturing<\/strong> property within specified construction\/service windows.<\/p>\n\n\n\n<p><strong>Can I stack \u00a748D with bonus or \u00a7168(n)?<\/strong><strong><br><\/strong>Often yes; model basis effects and consider <strong>credit transferability<\/strong>.<\/p>\n\n\n\n<p><strong>What changed for FDII\/GILTI?<\/strong><strong><br><\/strong>Renamed to <strong>FDEI\/NCTI<\/strong>; \u00a7250 deductions <strong>33.34%\/40%<\/strong>; <strong>QBAI 5%<\/strong>; broader scope for certain property sales.<\/p>\n\n\n\n<p><strong>Did FTC baskets get simpler?<\/strong><strong><br><\/strong>Yes\u2014only <strong>passive<\/strong> and <strong>general<\/strong> remain, with \u00a7250 items\/related foreign taxes in <strong>general<\/strong>.<\/p>\n\n\n\n<p><strong>Is CFC look-through permanent?<\/strong><strong><br><\/strong>Yes\u2014<strong>\u00a7954(c)(6)<\/strong> permanence stabilizes intercompany payments tied to active business.<\/p>\n\n\n\n<p><strong>What\u2019s the new CFC timing rule?<\/strong><strong><br><\/strong><strong>Day-count<\/strong> inclusions; \u00a7956 requires ownership on the <strong>last CFC day<\/strong>; Treasury can force a year-end close on certain transfers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion &amp; Next Steps (with CPA Pilot)<\/strong><\/h2>\n\n\n\n<p>Chapter 3 rewards <strong>good timing<\/strong> and <strong>clean tracking<\/strong>. Get assets in service on the right dates, tag <strong>domestic<\/strong> R&amp;D, and refresh <strong>international<\/strong> models to capture year-1 deductions and credit benefits. <strong>CPA Pilot<\/strong> helps you do this fast, accurately, and at scale.<\/p>\n\n\n\n<p><strong>What to do now<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Lock asset timing &amp; elections:<\/strong> Decide <strong>bonus vs \u00a7179 vs \u00a7168(n)<\/strong>; generate election statements.<\/li>\n\n\n\n<li><strong>Stand up R&amp;D + interest workflows:<\/strong> Tag domestic R&amp;D for <strong>\u00a7174A<\/strong>; rebuild <strong>\u00a7163(j)<\/strong> with the permanent add-back and non-capitalization ordering.<\/li>\n\n\n\n<li><strong>Reset international sheets:<\/strong> Two baskets, \u00a7250 at <strong>33.34%\/40%<\/strong> with <strong>QBAI 5%<\/strong>, <strong>day-count<\/strong> for CFCs, and \u00a7951B diagnostics.<\/li>\n<\/ol>\n\n\n\n<p><strong>Why CPA Pilot<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Generate <strong>election statements<\/strong>, <strong>client memos<\/strong>, and <strong>workpapers<\/strong> in minutes.<\/li>\n\n\n\n<li>Run <strong>bonus vs \u00a7179 vs \u00a7168(n)<\/strong> and <strong>\u00a7163(j)<\/strong> calculators with audit-friendly outputs.<\/li>\n\n\n\n<li>Build <strong>\u00a7250\/FTC\/CFC<\/strong> worksheets (including <strong>day-count<\/strong> tracking) for cross-border clients.<\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-16018d1d wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-black-color has-luminous-vivid-amber-background-color has-text-color has-background has-link-color wp-element-button\" href=\"https:\/\/www.cpapilot.com\/pricing-plans\/\">Start with CPA Pilot<\/a><\/div>\n<\/div>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"has-vivid-red-color has-text-color has-link-color wp-elements-520730622b35160eff106db08195e8e5\"><em>This guide is practical information for professionals and not legal or tax advice. Always confirm Code\/regs and state conformity for your client\u2019s facts.<\/em><\/p>\n<\/blockquote>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Chapter 3 of One Big Beautiful Bill Act (OBBBA) (Sections 70301\u201370354) changes deductions, credits, interest limits, and international rules in ways that are easy to miss under deadline pressure. This page turns the law into timing checklists, election choices, and workpapers you can ship. TL;DR &#8211; OBBBA Chapter 3 The pain you\u2019re dealing with How [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":2028,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[46],"tags":[45],"class_list":["post-2025","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-us-tax-news","tag-us-tax-news"],"modified_by":"CPA Pilot","_links":{"self":[{"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/posts\/2025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/comments?post=2025"}],"version-history":[{"count":5,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/posts\/2025\/revisions"}],"predecessor-version":[{"id":2168,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/posts\/2025\/revisions\/2168"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/media\/2028"}],"wp:attachment":[{"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/media?parent=2025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/categories?post=2025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/tags?post=2025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}