Title: New PATH for depreciation - Journal of Accountancy
Headings: New PATH for depreciation
New PATH for depreciation
2016 law offers opportunities for qualified real property.
15-YEAR PROPERTY DESIGNATION MADE PERMANENT
SEPARATE SEC. 179 DOLLAR LIMITATION REMOVED
BONUS DEPRECIATION EXTENDED

Content: Under the new rule, the improvement is eligible for bonus depreciation any time after the building is first placed in service. Last, there is no common area restriction. So, for instance, common area improvements in multi-tenant buildings and interior improvements in an owner-occupied building or tenant improvements in a less-than-3-year-old building are now eligible for bonus depreciation. The qualified improvement property concept is specific to bonus depreciation only. Qualified improvement property expenses may also be eligible for Sec. 179 expensing but must be tested under the qualified real property definitions discussed above. It appears that most qualified retail improvements would be considered qualified improvement property. Qualified restaurant property that is eligible for a 15-year recovery period may not be eligible for bonus depreciation. For example, qualified restaurant property, unlike qualified improvement property, can consist of an entire building. For taxpayers in restaurant or retail businesses or with business leasehold improvements, these PATH Act provisions may spell advantageous new ways to expense real property assets or accelerate their depreciation.