Source: http://www.mfa-cpa.com/en/Our%20Insights/2017/06/IRS%20Issues%20Clarifying%20Guidance%20on%20the%20PATH%20Act%20Changes%20to%20Section%20179%20and%20Bonus%20Depreciation.aspx
Timestamp: 2017-06-28 07:14:06
Document Index: 215255497

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

Air Conditioning Units Qualifying as §179 Property Rev. Proc. 2017-33 clarifies that, in addition to portable air conditioning or heating units meeting the requirements to be classified as §179 property, if a component of a central air conditioning or heating system meets the definition of qualified real property, as defined in §179(f)(2), and the component is placed in service by the taxpayer in a taxable year beginning after 2015, the component may qualify as §179 property if the taxpayer elects to apply §179(f). As provided in §179(f)(2), qualified real property includes qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property.
Acquisition Date Requirement for Qualified Property Qualified property described under §168(k)(2)(A) no longer has to meet the acquisition date requirements in §168(k)(2)(A)(iii) that were in effect prior to the enactment of The Act. Property acquired after December 31, 2007, and before January 1, 2020, that meets all other requirements of §168(k), is qualified property. Note that The Act imposes a new acquisition date requirement for property described in §168(k)(2)(B) and (C) (i.e. long production period property and certain aircraft). Placed-In-Service Date Requirement for Qualified Improvement Property Qualified improvement property is defined in §168(k) as “any improvement 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 placed in service.” The term “first placed in service” means the first time the building is placed in service by any person. Rev. Proc. 2017-33 provides several examples illustrating that improvements placed in service any time after the building is placed in service, even one day later, can qualify for bonus depreciation. This includes the initial build out of tenant spaces in a commercial rental building as discussed in example 4 of the revenue procedure. Qualified Restaurant Property Qualified property that is placed in service by the taxpayer after December 31, 2015, and that meets the definition of both qualified improvement property and qualified restaurant property, as defined in §168(e)(7), is eligible for the additional first-year depreciation deduction under §168(k), assuming all other requirements in §168(k) are met. Rev. Proc. 2017-33 provides two examples illustrating when qualified restaurant property is, or is not, also qualified improvement property. Phase Down of Additional First-Year Depreciation Percentage Two tables in Rev. Proc. 2017-33 provide the additional first-year depreciation deduction percentages for qualified property placed in service by the taxpayer after 2015 and before 2020 (2021 for property described in §168(k)(2)(B) or (C)). The first table addresses property that is not described in §168(k)(2)(B) or (C) and the second table addresses property that is described in §168(k)(2)(B) or (C) (i.e. long production period property and certain aircraft). Other Guidance Provided by Rev. Proc. 2017-33 In addition to the guidance addressed above, Rev. Proc. 2017-33 provides guidance for other areas of §§179, 168(k), and 168(j) affected by The Act, including making §179 elections by amended returns, rules for making the election under §168(k)(7) not to deduct the additional first-year depreciation deduction, special rules for certain plants bearing fruits and nuts and the §168(k)(5) election for a specified plant, and the §168(j)(8) election not to apply §168(j).
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