The Tax Cuts and Jobs Act (“TCJA”) is a treasure trove of tax law changes which may (at least temporarily) reduce the tax liability of businesses. One area of tax benefit for businesses is the TCJA expansion of the expenses which may be immediately expensed. These areas include:
- Subject to a $2.5M phase-out limitation, businesses may immediately expense certain improvements to nonresidential real property. Qualifying improvements include costs to enlarge a building, new elevators or escalators, internal structural framework, and roofs, HVAC, fire protection and security systems.
- Temporary 100% bonus depreciation for qualifying property acquired and placed in service after September 27, 2017 and before January 1, 2023.
- The recovery period under the alternative depreciation system reduced the recovery period for residential rental property from 40 years to 30 years.