Building owners can now fully expense qualifying fire alarm improvement costs in year one.
The 2020 Coronavirus Aid, Relief and Economic Security (CARES) Act provides economic assistance to American workers, families and small businesses, including tax savings for businesses. The CARES Act allows commercial building owners to benefit from an accelerated tax deduction for the full cost of such property due to tax code changes related to “qualified improvement property” (QIP) investments.
Under Section 168 (of the CARES Act) of the tax code, the cost of improvements to existing fire alarm and life safety systems (including bi-directional amplifiers) can now be fully deducted for tax purposes in the first year versus over a 39-year period. The benefit for building owners is the qualified investment may be fully deducted as a business expense in the first year, immediately reducing their costs.
Additional facts relating to SECTION 168 QUALIFIED IMPROVEMENT PROPERTY (QIP):
- Applies to existing commercial or non- residential buildings (new construction does not apply)
- Cost of equipment and labor are considered part of the full taxable deduction
- No limits or caps on amount of product purchased for QIP
Can retroactive prior QIP costs incurred back to January 1, 2018