New for 2016, the IRS added a new classification for building remodeling costs. Qualified Improvement Property is defined as any improvement to an interior portion of a building that is nonresidential real property as long as the improvement is placed in service after the building was first placed in service by any taxpayer. There are a few other excluded expenditures. While this new classification of property is still depreciable over 39 years, it is eligible for 50% bonus depreciation if completed in 2016 or 2017. This is a great incentive to get remodeling projects that you have been putting off done today.
Call the Ketel Thorstenson Tax Team with any questions, 605-342-5630.