Tax Warrior Chronicles

Depreciation Changes Under CARES Act - Qualified Improvement Property

Posted on Tue, Mar 31, 2020

Taxpayers and practitioners nationwide have been waiting over 2 years for a technical correction to fix an error in the 2017 Tax Cuts & Jobs Act (TCJA) related to depreciation of Qualified Improvement Property (QIP).  The error was finally fixed in the recently enacted Coronavirus Aid, Relief and Economic Security Act (CARES Act), and the change has created significant tax-reduction opportunities for some taxpayers.

 

Background

Prior to the TCJA, non-residential improvements were classified as either Qualified Leasehold Improvements, Qualified Restaurant Property, or Qualified Retail Improvement Property.  The TCJA replaced these three types with one “Qualified Improvement Property”

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Relief from the Tangible Property Regulations… Should You Take the Bait?

Posted on Tue, Mar 03, 2015

The IRS recently issued Revenue Procedure 2015-20 providing relief for many small businesses from the administrative burdens required to adopt the new tangible property regulations effective for 2014.  The tangible property regulations, which are more commonly known as the “repair regulations,” provide new rules for determining which costs should be capitalized and which should be expensed, and essentially require you to forget everything you once knew on the topic.  Old standards like “useful life beyond a year” have been scrapped and replaced with new terms of art: to be capitalized as an improvement, an expenditure must now rise to the level of a “betterment, adaptation, or

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