At the end of July (7/31), the IRS issued Revenue Procedure 2019-33 (“RP 2019-33”) allowing a taxpayer to make a late election, or to revoke an election, under section 168(k) of the Internal Revenue Code. This applies to certain property acquired by the taxpayer after September 27, 2017, and placed in service by the taxpayer during its taxable year that includes September 28, 2017.
The Tax Cuts and Jobs Act (TCJA) made several changes to bonus depreciation.
Section 13201 of the TCJA amended § 168(k) in several ways. It increased the additional first-year depreciation deduction percentage from 50 to 100%. It also expanded the property eligible for the additional first-year depreciation deduction to include certain used depreciable property and certain film, television, or live theatrical productions. It extended the placed-in-service date to before January 1, 2027. Also, the date on which a specified plant is planted or grafted by the taxpayer was extended to before January 1, 2027.
There are also the following three additional first-year depreciation deduction elections:
- A taxpayer may elect not to deduct the additional first-year depreciation for all qualified property if it is in the same class of property and placed in service by the taxpayer in the same tax year.
- A taxpayer may elect to deduct 50-percent, rather than 100%, additional first-year depreciation for all qualified property acquired after September 27, 2017, and placed in service by the taxpayer during its taxable year that includes September 28, 2017.
- A taxpayer may elect to deduct additional first-year depreciation for any specified plant that is planted after September 27, 2017, and before January 1, 2027, or grafted after and before those dates to a plant that has already been planted. If the taxpayer makes this election, the additional first-year depreciation deduction is allowable for the specified plant in the taxable year in which that plant is planted or grafted.
Revenue Procedure 2019-33 applies to these elections for the taxable year that includes September 28, 2017. RP 2019-33, for a limited period of time, allows the taxpayer to make late elections. If a taxpayer did not make these elections timely for that taxable year, the taxpayer must file an amended return or a Form 3115.
If a taxpayer did make these elections timely for that taxable year, RP 2019-33, for a limited period of time, also allows the taxpayer to revoke the elections by filing an amended return or a Form 3115.
If you live in the New York or the Tri-State area and have any questions about any tax-related issues, including bonus depreciation, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com. For a FREE consultation call 212-490-0704.
