How Doctors Can Write Off a New Building in One Year - OBBB Update #7
Unlock 100% bonus depreciation with qualified production property
For decades, the rule for commercial real estate estate has been simple: you depreciate the building over 39 long years.
It’s a slow, grinding process - locking up your capital and delaying your return on investment.
But what if somebody handed you a magic wand that let you to write off the entire cost of your new medical or dental building - all in one year?
This isn’t wishful thinking.
Thanks to a powerful but overlooked provision in the OBBB, the dream is now a reality for certain types of real estate.
Let's break it down.
From Frustration to Financial Windfall: A Strategy in Action
Picture this: you're an oral surgeon.
You're tired of supply delays and the high cost for dental implants. You want better quality, more consistency - and full control over the process.
So you decide to manufacture your own.
Good news: there is a large, underutilize parking lot next to your practice.
You invest $1 million to build a small manufacturing facility on it.
Under the old rules, your annual depreciation deduction would be just $25,641 - at best.
But under the new OBBB, you could potentially write off the entire $1 million in one year.
WOW.
How? Meet Qualified Production Property (QPP)
The new OBBB introduced a new asset class: Qualified Production Property.
This includes certain non-residential commercial buildings using in the U.S for
Manufacturing
Producing (agricultural and chemical)
Refining tangible personal property
If your building qualifies, it’s eligible for 100% bonus depreciation in the year it's place in service.
That's a game changer.
Let's Do The Math
Construction Cost: $1,000,000
Marginal Tax Rate: 45% (37% federal + 8% state)
Year-One Tax Write-Off: $1,000,000
Immediate Tax Savings: $450,000
That $450,000 in cash flow you could use right now - to reinvest in equipment, hire top-tier staff or expand your R&D.
Do You Qualify? Here is a QPP checklist.
To unlock this massive tax break, your project must meet these requirements:
Property type
Must be non-residential commercial property, such as a medical or dental building.
Residential buildings or lodging facilities do not qualify.
Primary use
The building must be used for qualified production activity. This means substantially transforming tangible goods.
Example: turning raw materials into finished dental implants qualifies.
Simple assembly or repackaging does not qualify.
Timing deadlines
Construction must begin before January 1, 2029.
The building must be placed in service before January 1, 2031.
Election required
You must file an election on your tax return to treat the building as QPP.
Important Caveat: Not Every Square Foot Counts
The following area areas are excluded from bonus appreciation
Office space
Administrative or HR areas
Parking lot
Lodging
Research area not directly integrated with manufacturing
If your building is 100% dedicated to manufacturing, you’re golden.
But if it's a mixed-use facility, you'll need to work with a tax advisor to properly allocate the qualifying square footage - and ensure you get the fully benefit of bonus depreciation.
This Isn't Just a Tax Break - It’s a Strategic Shift
Doctors and dentist don't usually think like manufacturers.
But here's the reality: when you control your supply chain, you also control your quality, your costs, and your future.
This tax provision makes vertical integration realistic - even for small practices
It’s one of the most generous tax opportunities available today.
If you're considering building a facility to produce your own medical or dental products, the time to act as now.
Final thoughts
This is your golden moment to think bigger.
Instead of locking up capital in slow, 39-year depreciation, unlock a potential 45% immediate tax savings.
Let the tax code help fund your expansion - and supercharge your business
Just make sure you plan ahead. The clock is ticking.
Start designing your future now - before this powerful provision phase out.
Disclaimer: click here