Everything You Need to Know About Real Estate Depreciation (REDE)

Robert Lickwar, CPA, Lance Weiss, CPA, CVA, Terri S. Johnson, CRE, Michael J. Tucker, CPA, LL.M. (moderator)
  • 3
  • Intermediate
  • Taxes

3-hr. course: $89; 4-hr. course: $129
Volume Discounts:Click here for details.

Overview

Congress restored the $500,000 Section 179 deduction, bonus depreciation and 15-year qualified real property when it passed the Protecting Americans from Tax Hikes Act of 2015 (PATH) in December 2015. Earlier, the IRS had issued very complex repair regulations and Rev. Proc. 2015-56, which provides a safe harbor accounting method for the retail and restaurant industries to determine whether costs paid to refresh or remodel a qualified building are deductible or if they must be capitalized. All of these new provisions interact in complex ways. This program outlines all the new rules and explains how and when expenditures must be capitalized and depreciated and when they should be expensed. 

Major Topics:

  • Depreciation rule changes relating to Section 179, bonus and 15-year qualified real property applicable to 2016 and after
  • When taxpayers may take the Section 179 deduction
  • When related party rules prevent using an accelerated depreciation method
  • Summary of how the repair regulations determine when expenditures relating to buildings and tangible property should be capitalized or expensed
  • Safe harbor elections that taxpayers can make under the repair regulations to expense items that otherwise might be capitalized
  • Revenue Procedure 2015-56: the election to expense 75% of expenditures relating to certain types of real estate
  • Meaning of the “placed in service” requirement

Learning Objectives

Update tax practitioners regarding depreciation methods and issues applicable to 2016 and after

Any tax practitioner who wishes to understand the current environment relating to when expenditures should be capitalized and when they can be expensed, and the methodology that can be used to depreciate such expenditures

Basic understanding of the tax rules dealing with individual income taxation

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Varies by state. Click here for details