Qualified improvement property is any improvement made by a taxpayer to an interior portion of an existing building that is nonresidential real property.
Examples include interior doors, plumbing, electrical, drywall, ceiling, and fire protection. Not included are enlargements to the building, elevators, escalators, and improvements related to internal structural framework.
In Tax Reform (the Tax Cuts and Jobs Act of 2017) a drafting error caused QIP to not be included in the definition of 15 year property, and the Treasury held QIP is 39 year property, and thus ineligible for bonus depreciation until a legislative correction is made.
The CARES act has corrected this, and QIP is now eligible for 100% bonus depreciation, providing significant tax savings for taxpayers.
Contact Tax Attorney Abtin Barzin for help with projecting the cost/benefit in your taxes of improvements and other depreciable assets.