IRS Issues Final Regulations for 100% Bonus Depreciation.
Section 168(k)(10), as amended by the TCJA, provides taxpayers with an election to claim 50% bonus depreciation in lieu of 100% bonus depreciation for qualified property acquired after September 27, 2017, and placed in service during the taxpayer's first tax year ending after September 27, 2017. The Proposed Regulations clarify that such.
Now that it’s been corrected, taxpayers must consider how to capture lost bonus depreciation. Last week, the IRS released Rev. Proc. 2020-25, which sets forth the procedures for taxpayers seeking to implement the CARES Act’s Technical Correction for QIP.
Under the Act, qualified property is generally eligible for 100% bonus depreciation if it is acquired and placed in service after September 27, 2017, and before 2023 (with certain long-lived property, transportation property, and aircraft eligible through 2023). Bonus depreciation phases out after 2022 on a set schedule. Under the Act, both new and used property are generally eligible for.
The CARES Act provides a long-awaited technical correction for qualified improvement property (QIP), enabling taxpayers to claim 100% bonus depreciation on eligible QIP. The amendments are retroactive to the effective date of the Tax Cuts and Jobs Act (TCJA) and are applicable to property placed in service on or after January 1, 2018. Taxpayers may either file an amended return for 2018 and.
The CARES Act fixes a TCJA error: qualified improvement property (QIP) and the ability of businesses to deduct 100% bonus depreciation on such property.
Thus, real estate owners, as well as restaurant and retail businesses, who previously would have qualified for the 50% bonus depreciation provisions applicable prior to the 2017 Tax Act, would now potentially qualify for the 100% bonus depreciation for qualified improvement property placed in service after December 31, 2017. Also, as noted above, the new term “qualified improvement property.
On Dec. 22, 2017, the TCJA amended Sec. 168(k) to increase the bonus depreciation percentage from 50% to 100% for qualified property and to modify the definition of property that is considered to be qualified. The new rules apply to property acquired and placed in service after Sept. 27, 2017, and before Jan. 1, 2027 (or before Jan. 1, 2028, for longer production period property (LPPP)). Bonus.