Qualified Improvement Property

When Congress drafted the Tax Cuts and Jobs Act (TCJA), it allowed for 100 percent bonus depreciation rules to apply to all MACRS property with a recovery period of 20 years or less. Before TCJA, qualified improvement property was depreciated as 39 year residential real property, unless it separately qualified as 15 year qualified leasehold improvement property, 15 year retail improvement property, or 15 year restaurant property. Congress eliminated the three separate categories of 15 year improvement properties with the intention of making all qualified improvement property 15 year property. However, it failed to do so, and as a result, qualified improvement property is depreciated as 39 year property and not qualified for bonus depreciation.