Tuesday, October 12, 2010

Qualified real property expensing

For the first time, certain real property can be expensed under code section 179.

First I will list items that will apply, then I will list specific items that do not apply, then I will talk about further limitations.

So to start out, types of property that definitely apply include:

1. Qualified leasehold improvement property

2. Qualified restaurant property.

3. Qualified retail improvement property

Types of property that do not apply include lodging property.

Further limitations apply to the deductibility of 179 deprecation of real property. One such example is that no amounts may be deducted in a year after 2010, so you must use your deduction in 2010, then depreciate the remaining property value as you would have without considering 179 depreciation, after the 2010 tax year (similar calculation as using section 168(k) bonus depreciation).

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