Placed-in-Service Date Explained

Why the date matters

The date determines the first-year convention: the month for buildings under mid-month, and whether personal property falls into the last quarter for the mid-quarter test. It also determines which bonus depreciation rules apply. Under current law, the acquisition date matters too: 100% bonus depreciation applies to qualified property acquired after January 19, 2025.

A December building placement still produces a half-month of depreciation. A December personal-property placement can flip the entire year’s personal property to mid-quarter if the 40% test is met.

Look-back studies classify each component as of its original placed-in-service date and the law then in effect. A 2022 placement does not become eligible for the post-January 19, 2025 100% rate because a study is written in 2026.

Documenting it

Evidence such as a certificate of occupancy, listing records, a first lease, or completion paperwork helps show when the property was ready and available. A cost segregation report usually states the placed-in-service date it relied on.

For new construction, substantial completion, a certificate of occupancy, and the date the building was available for its assigned use are the usual file. For a rental, listing after repairs is the Publication 946 illustration. A vacant building that cannot yet be occupied is generally not ready, even if the deed has already transferred.

If the report’s date differs from the date already used on a prior return, the CPA needs to know before posting the schedule. Changing the year of placement can be a larger issue than changing a class.

Different dates for different assets

Site work, a first building, and later personal property can enter service in different months or years. Each asset has its own date.

Self-constructed property has a separate acquisition-date rule for bonus purposes: construction is generally treated as begun when physical work of a significant nature begins, with a 10% cost safe harbor that excludes land and preliminary activities. Notice 2026-11 applies those rules with the January 19, 2025 dates.

A component election can treat later components of a larger self-constructed project as separately tested. That election is made on the return for the year the larger property is placed in service.

What the date is not

It is not the contract date, the loan-closing date, or the date depreciation software is first opened. Those events can coincide with readiness, but they are not the test.

It is also not the date a study is delivered. A look-back study written years later still uses the original readiness date.

Open questions

The regulation cross-references older investment-credit placed-in-service rules in Treas. Reg. §1.46-3(d). That section was not fetched in the October 2026 research session. Close cases should be reviewed against that text.

Until that confirmation, this article relies on Publication 946, Publication 527, and the readiness sentence in §1.167(a)-11(e)(1). Close cases — a building occupied in stages, a certificate of occupancy with conditions, or equipment installed before the structure is ready — should be reviewed against that older regulation text as well.