- The Treasury Department and the Internal Revenue Service (IRS) have released the last set of final regulations implementing the 100% additional first year depreciation deduction enacted in the Tax Cuts & Jobs Act of 2017.
- The provision allows businesses to write off costs of most depreciable business assets in the year they're placed in service.
- The write-off applies to depreciable business assets with a recovery period of 20 years or less. Machinery, equipment, computers, appliances and furniture generally qualify.
The deduction applies to qualifying property (including used property) acquired and placed in service after Sept. 27, 2017.
The final regulations provide clarifying guidance on the requirements that must be met for property to qualify for the deduction, including used property.
Additionally, the final regulations provide rules for consolidated groups and rules for components acquired or self-constructed after September 27, 2017, for larger self-constructed property on which production began before Sept. 28, 2017.
The Treasury Department and the IRS plan to issue procedural guidance for opting to apply the final regulations in prior taxable years or to rely on the proposed regulations issued in September 2019.