Depreciation of retail leasehold improvements

[dasnowball]

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

[Just-Lisa-Now- · Accepted solution]

Is this box checked as YES ?

[TaxGuyBill]

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@dasnowball wrote:

the 2018 and 2019 returns and I select J2 for QRLI

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??? 

What year was this property "placed in service"?

[dasnowball]

Thanks so much.  That did it.

[dasnowball]

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.  

[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.

[dasnowball]

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

[dasnowball]

Thanks, that did work in 2019 changing to J5.