Source: https://www.pmbusinessadvisors.com/blog/the-irs-issues-new-administrative-authority-governing-the-tax-treatment-of-depreciation-and-expensing-rules/
Timestamp: 2019-03-19 16:53:53
Document Index: 171973337

Matched Legal Cases: ['§ 179', '§ 179', '§ 179', '§ 168', '§ 168', '§ 179', '§ 179', '§ 168', '§ 163', '§ 163', '§ 163']

The IRS Issues Authority Governing the Tax Treatment of Depreciation and Expensing Rules
I.R.C. § 179 by modifying the definition of “Qualified Real Property” that may be eligible as I.R.C. § 179 property pursuant to I.R.C. § 179(d)(1);
I.R.C. § 168 by requiring certain property held by an electing real property trade or business and reducing the recovery period under the Alternative Depreciation System (hereinafter “ADS”) from 40 years to 30 years for commercial residential real estate property; and
I.R.C. § 168 by requiring certain property held by an electing farming business to be depreciated under the ADS.
I.R.C. § 179 allowing taxpayers to deduct the cost of certain property as an expense when the property is placed in service. For tax years beginning after 2017, the maximum amount of the expense deduction under I.R.C. § 179 was increased from $ 500,000 to $ 1 million. In addition, the phase-out limitation was increased from $ 2 million to $ 2.5 million. These amounts are indexed for inflation for tax years beginning after 2018;
The category of businesses that must use the ADS under R.C. § 168(g) has been modified and expanded. A qualified farming business as defined under I.R.C. § 163(j)(7)(C) can elect out of the interest deduction limit of I.R.C. § 163(j). However, a qualified farming business that does elect out must now use the ADS for property with a recovery period of 10 years or more. A real property trade or business can also elect out of the I.R.C. § 163(j) limit. If it does, the business must use the ADS for nonresidential real property, residential rental property, and qualified improvement property;
The ADS recovery period for commercial residential real estate property has been modified to require a recovery period of 30 years; and
The Service’s statement of procedure also provides an optional depreciation table for commercial residential real estate property depreciated under the ADS with a 30-year recovery period.
As Published in January 2019 Issue of CPA Magazine
Peter J. Scalise serves as the Federal Tax Credits & Incentives Practice Leader for the Americas at Prager Metis Business Advisors, LLC. Peter is a highly distinguished BIG 4 Alumni Tax Practice Leader and has over twenty-five years of progressive CPA Firm experience developing, managing and leading multi-million-dollar tax advisory practices on a regional, national, and global level. Peter serves on both the Board of Directors and Board of Editors for The American Society of Tax Professionals (ASTP) and is the Founding President and Chairman of both The Northeastern Region Tax Roundtable and The Washington National Tax Roundtable, operating divisions of ASTP.
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