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The historic $2 trillion stimulus package approved by Congress to address the coronavirus pandemic includes a much-needed fix for property owners who use cost segregation for faster depreciation through cost segregation.
Qualified improvement property (QIP) – which refers to the interior portion of a nonresidential building – was to have a 15-year depreciable life when tax reform was enacted in 2017. This would have qualified such property for 100% bonus depreciation and an immediate tax deduction. Instead, it was inadvertently omitted. Despite several attempts to fix it, QIP was assigned a depreciable life of 39 years.
The federal stimulus package fixed the drafting error and permits bonus depreciation to be taken for qualified property retroactively. This presents a tremendous source of cash flow for property owners to amend 2018 and 2019 filed returns.
Act now to revise your previous tax returns or adjust your cost segregation report completed for qualified projects.
Have you had a cost segregation study competed recently? Can you benefit from having a study completed now?
Engineered Tax Services conducts cost segregation studies to identify opportunities for faster depreciation. We will work with you to ensure you capture every opportunity for retroactive bonus depreciation as well as opportunities moving forward.
If you have completed a cost segregation study in the past two years that included Qualified Improvement Property simply complete the brief form below, and a member of our team will be in touch with you.