IRS Safe Harbor For Retail and Restaurant Industries
Transcript of IRS Safe Harbor For Retail and Restaurant Industries
IRS Safe Harbor For Retail and Restaurant
Industries
How can adoption of the
safe harbor benefit your
business?
Bonus Track: Tax
Depreciation
Legislative Update
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Effective Dates1 Percentage
Rates
9/11/2001 - 5/5/2003 30%
5/6/2003 - 12/31/2004 50%
1/1/2008 - 9/8/2010 50%
9/9/2010 - 12/31/2011 100%
1/1/2012 - 12/31/2017 50%
1/1/2018 - 12/31/2018 40%
1/1/2019 - 12/31/2019 30%
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Qualified Improvement Property
(QIP)
Qualified Leasehold
Improvement Property (QLHI)
Qualified Retail Improvement
Property (QRIP)
Qualified Restaurant Property
(QRP)
Applicable Dates Jan. 1, 2016 and onward Jan. 1, 2015 and onward Jan. 1, 2015 and onward Jan. 1, 2015 and onward
Important Notes
Any improvement to an interior
portion of a building that is non-
residential real property provided
the improvement is placed in
service after the date the building
was first placed in service.
Any improvement to an interior
portion of a nonresidential building
which is made under or pursuant to
a lease.
Any improvement to an interior
portion of a non-residential building,
which is open to the general public
and used in the trade or business of
selling tangible personal property to
the general public (i.e., retailer)
Any Section 1250 property that is a
building or improvement to a
building (new or existing structure)
where more than 50 percent of the
building’s square footage is
devoted to the preparation of, and
seating for, on-premises
consumption of prepared meals.
Non-qualifying
Improvements
Enlargement of building, elevators
or escalators, internal structural
framework of a building, structural
components that benefit a common
area.
Enlargement of building, elevators
or escalators, internal structural
framework of a building, structural
components that benefit a common
area.
Enlargement of building, elevators
or escalators, internal structural
framework of a building, structural
components that benefit a common
area.
N/A
3 Year Rule N/A Yes Yes N/A
Related Party
Rule N/A
Landlord and tenant cannot be
related parties. N/A N/A
Bonus
Depreciation
Eligible Yes Yes
Bonus eligible before January 1,
2016, if the property also meets the
definition of qualified leasehold
improvement property (QLHI).
Bonus eligible after December 31,
2015.
Bonus eligible before January 1,
2016 if the property also meets the
definition of qualified leasehold
improvement property (QLHI).
Bonus eligible after December 31,
2015 if the property also meets the
definition of qualified improvement
property (QIP).
Recovery Period 39 15 15 15
Tax Depr.
Convention and
Method
Mid-month convention/ straight
line method
Half-year convention/ straight line
method
Half-year convention/ straight line
method
Half-year convention/ straight line
method
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Technology1 2016 2017 2018 2019 2020 2021 2022 Future
Years
PV, Solar Water Heating, Solar Space
Heating/Cooling, Solar Process Heat 30% 30% 30% 30% 26% 22% 10% 10%
Hybrid Solar Lighting, Fuel Cells, Small Wind 30% N/A N/A N/A N/A N/A N/A N/A
Geothermal Heat Pumps, Microturbines,
Combine Heat and Power Systems 10% N/A N/A N/A N/A N/A N/A N/A
Geothermal Electric 10% 10% 10% 10% 10% 10% 10% 10%
Large Wind 30% 24% 18% 12% N/A N/A N/A N/A