Subject: Tax Planning Discussion: Arcade Game Bonus Depreciation Under IRC § 168(k) — [Your Business Name]

Dear [CPA Name],

I hope this email finds you well. I am writing to discuss a tax planning strategy involving the acquisition of commercial-grade arcade games for use in my trade or business, and I would like your professional guidance on implementation.

STRATEGY OVERVIEW

I am considering purchasing 10 commercial-grade arcade game(s) at approximately $100,000 each (total investment: $1,000,000) for use in [Your Business Name]. Based on my research, these assets may qualify for 100% bonus depreciation under IRC Section 168(k), as permanently restored by the One Big Beautiful Bill Act (OBBBA).

KEY TAX PROVISIONS

1. MACRS Classification: Arcade games fall under Asset Class 79.0 (Amusement and Recreation) with a 7-year GDS recovery period per IRS Revenue Procedure 87-56.

2. Bonus Depreciation: Under IRC § 168(k), as amended by the OBBBA, 100% bonus depreciation is permanently available for qualified property placed in service after January 19, 2025. This would allow a full $1,000,000 first-year deduction.

3. Listed Property Rules: Arcade games may be classified as listed property under IRC § 280F(d)(4), requiring:
   - Business use exceeding 50% (I plan to maintain 100% business use)
   - Contemporaneous records documenting business use under IRC § 274(d)
   - Annual substantiation of business use percentage

4. Filing Status: Married Filing Jointly
   Estimated Taxable Income (before deduction): $1,000,000

BUSINESS USE JUSTIFICATION

The arcade game(s) will be used in my trade or business for the following purposes:
- [Employee wellness / break room amenity to improve retention and productivity]
- [Client entertainment and relationship building in a professional setting]
- [Revenue generation through coin/token operation at a business location]
- [Please customize with your specific business use case]

FINANCING STRUCTURE

I am exploring a financing arrangement with 10% down payment ($100,000 cash outlay) and 90% dealer financing at 0% interest over 15 years. My understanding is that the full purchase price qualifies for bonus depreciation in Year 1 regardless of the financing structure, per established tax law.

QUESTIONS FOR YOUR REVIEW

1. Do you agree that these arcade games qualify as "qualified property" under IRC § 168(k)(2) for 100% bonus depreciation?

2. What specific record-keeping procedures would you recommend to satisfy the listed property substantiation requirements under IRC § 274(d)?

3. Given my Married Filing Jointly filing status and estimated $1,000,000 taxable income, what would be the projected federal (and state) tax savings from a $1,000,000 bonus depreciation deduction?

4. Are there any state-specific considerations or limitations on bonus depreciation that I should be aware of?

5. Would you recommend Section 179 expensing as an alternative or complement to bonus depreciation for any portion of this purchase?

6. What are the depreciation recapture implications under IRC § 1245 if I were to sell or dispose of the games in a future year?

I have attached a comprehensive guide on this strategy for your reference. I would appreciate the opportunity to schedule a meeting to discuss this further and determine the optimal approach for my tax situation.

Thank you for your time and expertise.

Best regards,
[Your Name]
[Your Business Name]

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DISCLAIMER: This email is for discussion purposes only and does not constitute tax advice. All tax planning decisions should be made in consultation with a qualified tax professional based on individual circumstances.