I blogged in the recent past regarding an issue with the new Tax Cuts and Jobs Act (TCJA) tax bill in which Qualified Improvement Property (QIP) was erroneously categorized as 39-year property, whereas the intention was to keep these assets as 15-year property with the added benefit of being 100% bonus eligible. Thus, not only were companies surprised that the QIP is not bonus eligible, but the double hit is that the TCJA actually put companies in a more disadvantageous position given that QIP previously was depreciable over 15 years.

We recently learned that over 100 retailers and restaurant companies wrote to Congress to request a fix to the QIP provision, which indicates that  there is activity pushing for a correction. While there is no guarantee that a fix will be implemented, at A&M, we recommend two steps: 1) continue to separately identify QIP in case there is a retroactive fix, and 2) conduct a cost segregation study given this can accelerate depreciation (which can provide a benefit whether or not QIP is bonus eligible).