As part of the Tax Cuts and Jobs Act, Congress created the qualified improvement property category.
It was intended to let you fully expense qualified property with bonus depreciation.
Unfortunately, Congress made a drafting error in the law which means you can’t use bonus depreciation for qualified improvement property.
But don’t let that get you down. We’ll explain how you might still be able to fully expense the property when you read my new article titled Tax Tips: Q&A: Qualified Improvement Property Snafu?
Three ways our fact-filled article can help you:
- We’ll tell you what caused this exasperating problem. We won’t get too technical here but suffice it to say that lawmakers screwed up big time. First they amended Section 168 to define qualified improvement property. But then they forgot to amend Section 168(e) to include the property as “15-year” property. You’ll learn the full implications of this mistake when you read the full after-tax-reform article.
- We’ll explain a workaround you can put to use. Qualified improvement property is currently ineligible for bonus depreciation, but you can still use Section 179 to expense it. A fantastic solution? Not really. But at least it can help you out as you’ll discover when you read the full after-tax-reform article.
- You’ll learn the drawbacks of using Section 179 expensing. There are several, including limits on your deduction, the phase-out of your deduction, and more. We’ll provide you with a complete analysis of the Section 179 solution — the good, the bad, and the ugly — when you read the full article.