#IRC 168 HOW TO#
#IRC 168 UPDATE#

The new regulations help explain the new rules established by TCJA. What are the key takeaways from the proposed regulations?

#IRC 168 HOW TO#

As explained in the Federal Register ( Reg-104397-18), вЂњthe proposed regulations instruct taxpayers how to determine the additional first year depreciation deduction and the amount of depreciation otherwise allowable for this property.вЂќ Overall, the provisions outlined in the proposed regulations describe and clarify the statutory requirements that must be met for depreciable property to qualify for the additional first year bonus depreciation. The new bonus depreciation schedule is as follows: Property Placed in Service or Acquired When a taxpayer constructs property itself, where no written contract is in place, the property is considered acquired when the taxpayer begins manufacturing, constructing or producing the property. Property purchased or constructed for the taxpayer by a third party is considered acquired when a written binding contract for the property is signed.

The property must also be acquired after September 27, 2017.

The proposed regulations generally retain the rules set out in Treas.

The placed-in-service date of the property must be after September 27, 2017.

The property must also meet the carryover basis requirements of IRC В§ 179(d)(2)(A),(B),(C), and Treas. The property is вЂњnew to youвЂќ if neither you, nor a related party, had a previously depreciable interest in the property. The sale-leaseback rules have been removed so property can be considered вЂњnewвЂќ even when you put a sale-leaseback transaction in place. The property is вЂњnewвЂќ if the original use of the property begins with the taxpayer.

The property may be new or used, but must be вЂњnewвЂќ to you.

Depreciable property includes qualified improvement property, computer software, water utility property, qualified film, TV productions and live theatrical performances. Your property must have a recovery period, as specified under MACRS, of 20 years or less.

The depreciable property must be of a specific type.

In order to be eligible for the extended and modified 100% bonus depreciation, your property must meet four key requirements: Section 168(k) allows a taxpayer to take an additional first year depreciation deduction in the placed-in-service year of qualified property.

#IRC 168 UPDATE#

The proposed regulations update the existing regulations in Treas. On August 8, 2018, the IRS issued proposed regulationsВ providing guidance on the 100% bonus expensing rules enacted by the Tax Cuts and Jobs Act (вЂњTCJAвЂќ) last December.

Irc 168