Article written by:
Kaz Unalan, CPA
Director, Tax & Business Advisory Services
Article originally published April 8, 2020
Last updated April 20, 2020
On Friday, April 17, 2020, the IRS issues Rev. Proc. 2020-25 on how to take advantage of the recently enacted technical correction to the rules for qualified improvement property (QIP) that was part of the CARES Act. Learn how to take retroactive bonus depreciation on QIP by clicking here.
On Wednesday, April 8, 2020, the Internal Revenue Service released Rev. Proc. 2020-23, which allows partnerships to file amended returns to get newly available tax breaks in years for which they already filed, such as 2018 and 2019. This Rev. Proc. allows partnerships subject to new centralized auditing regime rules to more easily take advantage of the benefits of the latest COVID-19 response package as part of the CARES Act. Under tax code Section 6031, partnerships subject to this auditing regime are barred from amending the form given to their partners after it’s due, unless the Treasury Department or the partnership’s representative files an Administrative Adjustment Request. Rev. Proc. 2020-23 allows those partnerships to amend their tax returns without those restrictions.
Within the CARES Act, Congress addressed the much anticipated “restaurant/retail glitch” associated with the 2017 Tax Cuts and Jobs Act (TCJA). This rule previously prevented investments in QIP from qualifying for bonus depreciation. With the passing of the CARES Act, the recovery period for QIP is reduced from 39 years to 15 years, thus making it eligible for 100% bonus depreciation through 2022. This change is retroactive to January 1, 2018 forward.