Solved

I just renovated a leased commercial property for my business, can I use Section 179 to deduct my" build out" or improvement expenses in a single year?

Forum|Forum|5 years ago
August 4, 2020
1 reply
0 views

No text available

Best answer by Anonymous_

"....can I use Section 179 to deduct my" build out" or improvement expenses in a single year?"

That would be dependent upon the type of improvements made and whether or not the business has sufficient taxable income (i.e., there are income limitations to Section 179).

You might want to start by reading the following IRS guidance and, particularly, the embedded link.

https://www.irs.gov/newsroom/irs-issues-guidance-on-section-179-expenses-and-section-168g-depreciation-under-tax-cuts-and-jobs-act

Further, you should be aware that Section 168(e)(6) of the Code defines qualified improvement property as "any improvement made by the taxpayer to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date such building was first placed in service". However, it excludes improvements for which the expenditure is attributable to the enlargement of the building, any elevator or escalator, or the internal structural framework of the building.

A

Anonymous_Answer

Employee

"....can I use Section 179 to deduct my" build out" or improvement expenses in a single year?"

That would be dependent upon the type of improvements made and whether or not the business has sufficient taxable income (i.e., there are income limitations to Section 179).

You might want to start by reading the following IRS guidance and, particularly, the embedded link.

https://www.irs.gov/newsroom/irs-issues-guidance-on-section-179-expenses-and-section-168g-depreciation-under-tax-cuts-and-jobs-act

Further, you should be aware that Section 168(e)(6) of the Code defines qualified improvement property as "any improvement made by the taxpayer to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date such building was first placed in service". However, it excludes improvements for which the expenditure is attributable to the enlargement of the building, any elevator or escalator, or the internal structural framework of the building.

A

Anonymous

if section 179 doesn't work the improvements may qualify under section 168 as 15-year property (qualified improvement property - 168 (e)(3)(e)(vii) 15 years is the recovery period for purposes of 168(k)

QIP is defined in 168(e)(6) as

(A)In general
The term “qualified improvement property” means any improvement made by the taxpayer to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date such building was first placed in service.

(B)Certain improvements not included - Such term shall not include any improvement for which the expenditure is attributable to—
(i)the enlargement of the building,
(ii)any elevator or escalator, or
(iii)the internal structural framework of the building.

under 168(k) property eligible for bonus depreciation

(2)Qualified property - For purposes of this subsection—
(A)In general - The term “qualified property” means property—
(i)
(I) to which this section applies which has a recovery period of 20 years or less,

note that while 179 is limited to business income bonus depreciation is not