The 2017 tax reform act (the Act) renewed bonus depreciation for property acquired and placed in service after September 27, 2017. The Act retained an election to opt out of bonus depreciation and added an election to claim 50% bonus depreciation in lieu of 100% bonus depreciation for certain qualified property. A third election allows a taxpayer to claim first-year bonus depreciation for specified plants.
Proposed regulations provide rules for the time and manner of making these elections. The IRS recently published Rev. Proc. 2019-33, which provides guidance on these elections and procedures to change a previously made election or make a late election for certain tax years.
Rev. Proc. 2019-33 provides relief to taxpayers that had filed their federal income tax returns for the 2016 or 2017 tax year before publication of the proposed regulations, or had insufficient time to analyze the proposed regulations and their options before the filing due dates for those years. Taxpayers may wish to take advantage of the opportunity to re-evaluate the impact of making or forgoing an election in light of subsequently available information and to reconsider their decisions.