CFO Updates: The IRS fixed an error, and you get some cash for it…
We are helping our clients make the adjustment on their income taxes and get some quick cash.
Qualified Improvement Property (QIP)
In the CARES Act, Congress finally fixed the qualified improvement property (QIP) error when enacting the TCJA.
Qualified improvement property is an improvement made by the taxpayer to an interior portion of a nonresidential building (think office buildings, retail stores, and shopping centers) after the date you place the building in service.
The big deal with QIP is that it’s not considered real property that you depreciate over 39 years. QIP is 15-year property, eligible for immediate deduction using 100 percent bonus depreciation or Section 179 expensing. To get the QIP deduction in 2021, you need to place the QIP in service on or before December 31, 2021.
Planning note. If you have QIP property on an already filed 2018 or 2019 return, it’s on that return as 39-year property. It would help if you fixed that—and likely add some cash to your bank account because of the fix.
To learn more CFO tips and other powerful tax-saving strategies, book your free tax assessment here.