IRS Issues Final Rules for Bonus Depreciation Treatment


Final Rules for 2017 Tax Law's Depreciation Treatment Released

The IRS recently issued final regulations and new proposed regulations governing the 100% bonus depreciation deduction under Sec. 168(k). The final regulations finalize proposed regulations issued in August 2018 (REG-104397-18) with some changes in response to comments.

REG-106808-19 contains new provisions not addressed previously. Both sets of regulations have been posted to prior to their official publication in the Federal Register.

Final Regulations

The final regulations adopt the August 2018 proposed regulations with some modifications. They provide operational rules and address how to compute additional bonus depreciation and how to make elections under Sec. 168(k). They provide clarifying guidance on the requirements that must be met for property to qualify for the deduction under Sec. 168(k), including used property.

The final regulations provide rules for qualified film, television, and live theatrical productions. They also clarify how the basis of property that is subject to the alternative depreciation system is determined when it otherwise qualifies for bonus depreciation.

The final regulations can be found here.