Title: Building improvements now eligible for bonus depreciation | Williams-Keepers LLC
Headings: Building improvements now eligible for bonus depreciation
Building improvements now eligible for bonus depreciation
“Qualified improvement property” definition
Qualification Changes
How this change will affect business owners
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Posted By Katie Barthel, CPA on 7-29-2016                | Topics: Articles,

Content: Improvements that are not included in this definition are building additions, an elevator or escalator, or internal structural framework for the building. Fortunately, qualified improvement property comprises most other improvements, including the following: Internal cooling/heating items
Lighting and other electrical
Plumbing
Ventilation
Energy management systems
Permanent floor coverings
Fire protection and alarm systems
Woodwork
Exit signs
Restroom partitions
Building security systems
Permanent but not load-bearing walls
Doors
Ceilings not needed for building stability
Structural components that benefit a common area
Qualification Changes
In 2015 and prior years, building improvements were not eligible for bonus depreciation unless they qualified as one of the following types of property: qualified leasehold improvement property; qualified restaurant property; or
qualified retail improvement property. Qualifying as one of these types of property was fairly challenging. For example, qualified leasehold improvement property required (1) the building to be leased, (2) the building to be substantially occupied by the lessee or sublessee, and, (3) such improvement to be placed in service no earlier than three years after the date the building was first placed in service. Now with the passage of the PATH Act, building improvements can be eligible for bonus depreciation without these types of stipulations. Businesses can take advantage of this accelerated depreciation deduction if it improves its own realty, not just realty that it leases.