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September 21, 2020

BREAKING TAX NEWS | IRS and Treasury release second set of final bonus depreciation regulations under IRC Section 168(k)

The Treasury and IRS have released final regulations (T.D. 9916) on the allowance for the additional first-year depreciation deduction under IRC Section 168(k), as amended by the Tax Cuts and Jobs Act, for qualified property acquired and placed in service after September 27, 2017. T.D. 9916 finalizes, with modifications, the proposed regulations released in September 2019.

The final regulations provide guidance on issues not covered by the final regulations issued in 2019. Specifically, the final regulations establish rules addressing:

  • The definition of qualified property
  • Consolidated groups
  • Components acquired or self-constructed after September 27, 2017, for larger self-constructed property for which manufacture, construction, or production began before September 28, 2017
  • The application of the mid-quarter convention under IRC Section 168(d)

Additionally, the final regulations modify the definitions for qualified improvement property, predecessor and class of property.

A Tax Alert on the regulations is forthcoming.