Section 179

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I have a client that leases a building. They spent $20K on leasehold improvements. I am looking at taking these improvements as a QIP under Section 179.

It states that the qualified QIP deduction cannot include the "Internal Structure Framework of the Building"

Does this include the cost of changing and reconfiguring the internal walls of the building? Please help clarify this for me.

If not, then what QIP expenses actually qualify?

Thank you in Advance.

ProConnect Tax

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qbteachmt

Level 15

"the cost of changing and reconfiguring the internal walls of the building?"

Maybe.

"what QIP expenses actually qualify?"

Think of the difference in 15 year property and 39 year property. For instance, closets and cabinets are not structural.

Here are some resources.

https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act

https://www.irs.gov/newsroom/additional-first-year-depreciation-deduction-bonus-faq

https://www.jdsupra.com/legalnews/irs-releases-rev-proc-2020-25-qualified-14613/

https://www.irs.gov/pub/irs-drop/rp-20-25.pdf

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