Unfortunately, based on recent comments from Treasury, there may be no fix for Qualified Improvement Property being stuck in a 39-year depreciation category under the new tax bill. Thus, companies should not get their hopes up that QIP will be re-categorized into a shorter-lived depreciation period and become bonus eligible. They should assume it will remain as 39-year property.
But there are other mistakes Treasury can't maneuver around, he said. The report from Congress detailing the new law says that qualified improvement property—a category held by retailers, restaurateurs, and leasing businesses—is eligible for 15-year depreciation. But the statute doesn't assign it a category, so it would fall into the 39-year period by default. “My reaction is that there's not much we can do,” Trier said. “I'm not sure how Treasury can bail that one out.”