Final and proposed regulations expand bonus depreciation

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October 2019

Overview

The IRS and Treasury recently published final regulations on the expanded depreciation provisions under Section 168(k), enacted by the 2017 tax reform act. The final regulations apply to qualified property placed in service, and specified plants planted or grafted, in or after a tax year that includes September 24, 2019. The IRS and Treasury also released bonus depreciation proposed regulations that revise rules from proposed regulations published in 2018 and propose new rules on issues not previously addressed.

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The takeaway

For the most part, the final regulations and the 2019 proposed regulations provide clarifications and adopt rules, especially regarding self-constructed property and components, that significantly expand the availability of bonus depreciation for many taxpayers. The IRS and Treasury have indicated that they believe a technical correction is necessary to correct the omission of QIP from the category of 15-year property.

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Christine Turgeon

Partner, Federal Tax Services Leader, PwC US

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