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Depreciation of retail leasehold improvements

Forum|Forum|6 years ago
August 4, 2020
7 replies
34 views

Rev Proc 2020-25 changed the depreciation of qualified retail leasehold improvements from 39 yr to 15 yr life. When I try to amend the 2018 and 2019 returns and I select J2 for QRLI it still calculates the depreciation over 39 years. Has anyone figured out how to correct this without doing an override?

Thanks

Dorothy Ann Snowball

ProSeries Professional

This topic has been closed for replies.

Best answer by Just-Lisa-Now-

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Just-Lisa-Now-

Answer

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Is this box checked as YES ?

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D

dasnowballAuthor

Level 4

Thanks so much. That did it.

T

TaxGuyBill

@dasnowball wrote:
the 2018 and 2019 returns and I select J2 for QRLI

???

What year was this property "placed in service"?

D

dasnowballAuthor

Level 4

That solution worked for amending the 2018 return but when I try to amend the 2019 return it will not accept J2 as the life for the 2018 QRIP. What else do I need to check or correct.

T

TaxGuyBill

That is why I asked you what year it was "placed in service".

Qualified Retail Leasehold Improvements did NOT exist in 2018 or 2019, so you mis-categorized that. The 2019 program even warns you about and give you an error.

But it might qualify as "Qualified Improvement Property" (J5?).

As a comment from your original post, NO, Rev Proc 2020-25 did NOT change the depreciation of qualified retail leasehold improvements from 39 yr to 15 yr life.

The CARES Act changed Qualified Improvement Property from 39 years to 15 years retroactive back to 2018.

D

dasnowballAuthor

Level 4

Improvements added in 2018. I could amend the 2018 return and use J2 as the category but it doesn't seem to work for those same 2018 assets in 2019.

Thanks

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