The CARES Act made qualified improvement property eligible for a bonus depreciation. This includes many improvements to interior parts of nonresidential buildings, which is referred to as qualified improvement property (QIP).
 
The Act assigns a 15-year recovery period to qualified improvement property (QIP) placed in service after 2017, which also made QIP eligible for 100% bonus expensing under the general depreciation system (GDS). The recovery period is 20 years for ADS property, which is generally not bonus eligible. Without the technical correction a 39-year recovery period applied.
 
100% Bonus Depreciation
 
Taxpayers can take advantage of the recently enacted technical correction to the rules for qualified improvement property (QIP) and the CARES Act Provides 100% Bonus Depreciation for Qualified Improvement Property.
 
The revenue procedure, in general, provides the authority for taxpayers to file Forms 3115 or, alternatively, amend tax returns to reflect the retroactive, technical amendments made by the CARES Act.
 
What qualifies as qualified improvement property?
Qualified improvement property is defined as any improvement to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date the building was first placed in service.
 
If you have already filed returns that did not claim 100% bonus depreciation for what might be QIP, you can investigate based on available documentation. You would evaluate what your options are under IRS Rev. Proc. 2020-25, which was released by the IRS.

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