Using ASPIRE for New Bonus Depreciation (OBBBA - HR-1)
LTi does not provide legal or accounting advice, but rather guides the use of our software applications based on the requirements of our clients and the equipment finance industry. This document is intended to outline the potential impact of recent legislation on our clients and to identify ways in which we can assist clients in taking advantage of opportunities created by the legislation. All suggestions should be verified and tested prior to implementation in production. All decisions about applicability of this new opportunity for bonus depreciation should be validated with the help of your legal and finance experts.
General Information
HR-1 from the 119th United States Congress, commonly known as the One Big Beautiful Bill Act (OBBBA), established a new opportunity for equipment owners to take bonus depreciation. Based on the law, 100% Bonus Depreciation can be taken in the year of acquisition on a variety of assets put into service after January 19, 2025.
100% Bonus Depreciation allows for the equipment owner to fully expense the equipment in the year of acquisition, rather than using the standard MACRS tables.
This expensing method can offer federal income tax advantages in the equipment acquisition year potentially allowing beneficiaries to realize greater profitability, pass on savings to their customers in the form of more competitive pricing, or to apply savings to further business investment.
To take advantage of this new law on the assets managed in ASPIRE, you may be asking:
Qualification of leased assets for the noted depreciation rule is based on a variety of factors, some of which may be tracked in ASPIRE.
As new equipment is added to the system for new or existing leases, finance company team members can use their knowledge or other internal support tools and processes to determine eligibility for the new bonus depreciation.
For existing assets, ASPIRE Equipment Work Queues can be used to identify existing assets that might qualify for the new bonus depreciation, but that are not currently following the latest rules.
Potentially helpful data points for display or filter include:
Equipment Type
Tax Depreciation Start Date
Tax Depreciation Code
Tax Depreciation Depreciable Basis
Tax Depreciation Life
Sold
Abandoned
Off Lease
For ASPIRE purposes, this question can be broken down into two parts:
How do I set up the “rules” for depreciation?
How do I apply those rules to qualifying assets?
Setting up Depreciation “Rules”/Depreciation Codes and Tables in ASPIRE
ASPIRE offers many of the long-time standard depreciation tables (e.g., MACRS) out-of-the-box, while also allowing clients to configure their own depreciation tables.
An article is available on the Knowledge Base to help with the mechanics of setting up Depreciation Codes and Tables in ASPIRE:
Configuration of Depreciation Codes
Applying Depreciation Code to Qualifying Assets
ASPIRE supports calculation and tracking of Tax Depreciation on an asset-level for assets financed on contracts using a Finance Product with Default Tax Treatment set to “True
For more information on this functionality refer to Contract Explorer - Information - Equipment - Depreciation Tab (ASPIRE Help).
New Assets
When the asset is newly added to ASPIRE and is determined to qualify, the Tax Depreciation Code on the equipment in Contract Explorer – Equipment – Depreciation tab can be used to set and manage the depreciation setup and enable tracking of Tax Depreciation in ASPIRE.
Existing Assets
Due to the retroactive nature of the new rule, you may have equipment already under financing that qualifies for the new bonus depreciation.
If you found qualifying assets using the tips from this article on finding existing qualifying assets, you have multiple options to update the assets to take advantage of the new rule.
Equipment can be manually updated per record using the steps described for New Assets.
- Note, use the Effective Date for Change functionality to set a current date for the change so that existing accumulated depreciation will be maintained while the remaining depreciation for the year will be evenly distributed over the remaining months of the year.
Equipment can be updated in bulk using Bulk Asset Processing in ASPIRE.
An article is available on the Knowledge Base to help with using Bulk Asset Processing – Tax Depreciation Code Update
ASPIRE standard reports for Monthly Tax Depreciation and Annual Tax Depreciation offer a way to check the results of depreciation processing.
Note, updates will not show in the noted reports until after Month-End Processing is run in ASPIRE after the updates are made.
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