Interior renovation of building

Guidance on QIP Changes to Depreciation (Rev.Proc. 2020-25)

The IRS has issued guidance which allows a taxpayer to change its depreciation pursuant to Code §168, as amended by Sec. 2307 of the CARES Act, for certain QIP placed in service after 12/31/17 (i.e., for tax years beginning in 2018, 2019, or 2020). This procedure also describes how taxpayers can make a late election (i.e., by amending that prior year’s tax return), or revoke or withdraw an election, under Code §§168(g)(7), (k)(5), (k)(7), or (k)(10). The bottom line, as mentioned above, is that taxpayers are permitted to file an amended return, Administrative Adjustment Request (AAR) under Code §6227, or a Form 3115 (Application for Change in Accounting Method) to change their depreciation of QIP placed in service after 12/31/17 in their 2018, 2019,or 2020 tax year. (Code §168; QIP).

 

Authored by:

Dr. John Connors, JD, CPA, LLM

Tax Educator’s Network, Inc.

[email protected]

 

For subscription information on Dr. John Connors’ educational materials, click here.

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