The taxpayer has owned a commercial building for several years and replaced the roof (~$15k), and installed new windows (~$22K). Can any or all of this be section 179 expensed under the provisions of the Small Business Jobs Act of 2010? Part of the building is a restaurant, part other retail/office space, and part is residential rental. The whole building is being depreciated over 39 years.
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Section 179 is for personal property, not building improvements, so not under those rules. However, see info regarding extension of 15-yr depreciation for certain leasehold improvements, restaurant bldgs and improvements, and retail improvements. And why isn't the residential portion being depreciated over 27.5 yrs? -
There is
179 allowed in tha Act.Comment
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You are correct. However, the improvements mentioned were a roof and windows. These are not improvements made to the "interior of a nonresidential building." For it to qualify as "qualifed restaurant property," more than 50% of the building's square footage must be devoted to the the preparation of and seating for on-premises consumption of prepared meals." It is not clear this would apply to OP's situation, and I am not sure how it could be allocated if it did. Please see TTB 9-14 - 9-18 for additional information as well as IRC 168, and Pub 546.Comment
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It is for a select
three types of property - IRC Sec. 179(f). Qualified leasehold improvement, Qualified Restaurant property and Qualfied Retail Improvement Property.
Qualified Leasehold Improvement Property also qualifies for the 100% special depreciation.
Make sure you get the detail descriptions of the three classes.Comment
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Yes, I know. But, according to TTB, for the Qualified Leasehold Improvement 179 deduction and Qualifed Retail Improvement 179 deduction under the SMBJA, the improvements have to be to the interior of the building which is why I said not allowed. At least that is my understanding of it.Last edited by Burke; 07-19-2011, 04:54 PM.Comment
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