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Article Date:
September 2016

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Accelerated Tax Deductions for Qualified Leasehold Improvements

Finally, after years of torture, you can count on the special accelerated tax breaks that apply to qualified leasehold improvements. Thank the Protecting Americans from Tax Hikes (PATH) Act of 2015.1


Specifically, there are four different categories of real estate that lawmakers addressed with the PATH Act. This article will deal with the category of qualified leasehold improvements.


In the days after 1986 and before 2004, you depreciated your leasehold improvements to commercial property (nonresidential property per the tax code) over an agonizingly long 39 years using straight line depreciation only.


From 2004 through 2015, lawmakers often retroactively passed a one- or two-year so-called extender that



shortened the depreciation period to 15 years,


enabled Section 179 expensing, and


enabled bonus depreciation.


The retroactive enactment of the three tax breaks meant that you had to gamble if you were planning on the benefits. The good news in this article is that you don’t have to gamble this year and you won’t have to gamble again until 2020. ... Log in to view full article.

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