Section 179 Depreciation

[ungvarys]

Can I claim section 179 depreciation on improvements to an apartment complex?  The rules say only on nonresidential property, but to the partnership owners this is a commercial venture?

[Just-Lisa-Now-]

What happens when you fill out the asset entry worksheet and try to assign an amount as 179?

[IRonMaN]

It doesn't matter what kind of venture the owners think they are, the type of property being rented out is the determining factor in depreciation related matters.

[itonewbie]

Agree with the IRNM.

TCJA inserted the following clause to §179(d)(1) to expand "the definition of section 179 property to include certain depreciable tangible personal property used predominantly to furnish lodging or in connection with furnishing lodging" with respect to §1245 properties:

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Such term shall not include any property described in section 50(b) (other than paragraph (2) thereof).

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The footnote of the conference report also provides a clear reference for its application in relation to the existing code sections and regulations:

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As defined in section 50(b)(2). Property used predominantly to furnish lodging or in connection with furnishing lodging generally includes, e.g., beds and other furniture, refrigerators, ranges, and other equipment used in the living quarters of a lodging facility such as an apartment house, dormitory, or any other facility (or part of a facility) where sleeping accommodations are provided and let. See Treas. Reg. sec. 1.48-1(h)

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The citations above should help you make a determination of whether your client's improvements should qualify for §179 under TCJA.