Bonus depreciation on tenant improvements extended

Claim your depreciation deduction for nonresidential properties!

26 United States Code §168
Amended by H.R. 8
Effective date: January 1, 2013

A 50% bonus depreciation is available for tenant improvements (TIs) on nonresidential property originally constructed and put into use between December 31, 2007 and January 1, 2014.

To qualify for this 50% depreciation deduction, the TIs must be constructed:

under a lease agreement;
on property used exclusively by the tenant; and
more than three years after the building was placed in service.

The following improvements do not qualify for the 50% depreciation deduction:

building enlargements;
elevators or escalators;
structural improvements to common areas; and
the internal structural framework of a building.

Editor’s note — This 50% bonus depreciation deduction was originally slated to expire on January 1, 2013. It was extended by The American Taxpayer Relief Act of 2012, otherwise known as a fiscal cliff deal. A similar but separate 100% first-year bonus depreciation deduction was available in 2011.