• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
CMR ASSOCIATES CPA - TAX ACCOUNTING | SPEED ACCURACY | SOLUTIONS

CMR Associates - Tax | Accounting | Staffing

Accuracy | Solutions | Speed

  • Services
    • Tax Accounting
    • Business Accounting and Fractional CFO
    • Business System Implementation
    • Remote CPA Staffing
    • Business Valuation
  • Industries
    • Construction & Job Costing Industries
    • Real Estate Accounting
    • Restaurants and Hospitality Accounting
    • Doctors
    • Retail
    • Musicians
  • About Us
  • New Clients
    • Onboarding
    • Pricing
  • Resources
    • Client Portal
    • IRS Authorization
  • Contact Us
  • Show Search
Hide Search
You are here: Home / Business Tax Advice / New COVID-19 law makes favorable changes to “qualified improvement property”

New COVID-19 law makes favorable changes to “qualified improvement property”

Louisiana CPA- New COVID-19 law makes favorable changes to “qualified improvement property”

New COVID-19 law makes favorable changes to “qualified improvement property”

The law providing relief due to the coronavirus (COVID-19) pandemic contains a beneficial change in the tax rules for many improvements to interior parts of nonresidential buildings. This is referred to as qualified improvement property (QIP). You may recall that under the Tax Cuts and Jobs Act (TCJA), any QIP placed in service after December 31, 2017 wasn’t considered to be eligible for 100% bonus depreciation. Therefore, the cost of QIP had to be deducted over a 39-year period rather than entirely in the year the QIP was placed in service. This was due to an inadvertent drafting mistake made by Congress.

But the error is now fixed. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. It now allows most businesses to claim 100% bonus depreciation for QIP, as long as certain other requirements are met. What’s also helpful is that the correction is retroactive and it goes back to apply to any QIP placed in service after December 31, 2017. Unfortunately, improvements related to the enlargement of a building, any elevator or escalator, or the internal structural framework continue to not qualify under the definition of QIP. 

In the current business climate, you may not be in a position to undertake new capital expenditures — even if they’re needed as a practical matter and even if the substitution of 100% bonus depreciation for a 39-year depreciation period significantly lowers the true cost of QIP. But it’s good to know that when you’re ready to undertake qualifying improvements that 100% bonus depreciation will be available.

And, the retroactive nature of the CARES Act provision presents favorable opportunities for qualifying expenditures you’ve already made. We can revisit and add to documentation that you’ve already provided to identify QIP expenditures.

For not-yet-filed tax returns, we can simply reflect the favorable treatment for QIP on the return.

If you’ve already filed returns that didn’t claim 100% bonus depreciation for what might be QIP, we can investigate based on available documentation as discussed above. We will evaluate what your options are under Revenue Procedure 2020-25, which was just released by the IRS. 

If you have any questions about how you can take advantage of the QIP provision, don’t hesitate to contact us.

Business Tax Advice

Primary Sidebar

Tax. Accounting. Solutions.

Need a good accountant? We can help. Serving clients globally, we embrace distributed work environments. Book a call to learn more.

Book an appointment with Personnel Calendar using SetMore

About CMR Associates

Covington CPA and Tax Accountants Team

Tax Accounting and Business Consulting: We provide tax accounting, business accounting, Outsourced CFO, back-office CPA staffing, business system implementation, payroll, business valuation, consulting, and strategic planning services. …

Publication by CMR Associates

Charles Renwick CPA

All of the latest publications from the directors and staff at CMR …

TAX NEWS AND ADVICE

  • Business Tax Advice
  • Individual Tax Advice
  • Outsourced Accounting
  • Personal Finance
  • Remote Work

Terms and Conditions
Outsourced Accountant CPA
All the Presidents’ Taxes

Get solutions today with CMR Assocaites. Learn More

CMR Associates - Tax | Accounting | Staffing

© 2025 · Sitemap

  • Services
  • Industries
  • About Us
  • New Clients
  • Resources
  • Contact Us