Pub. 8 2020 Issue 3

13 The Community Banker building was placed in service. QIP does not include the enlargement of a building, elevators or escalators, or the building’s internal structural framework. Until late March of the 2020 tax filing season, taxpayers treated QIP placed in service during 2018 and 2019 as 39-year property available for expensing through Section 179. Although Section 179 could allow certain taxpayers to expense 100% of QIP, limita- tions apply to Section 179 that do not apply to bonus depreciation. Namely, Section 179 is not available for rental activities, is limited to business income, and cannot create a net loss. These limitations could delay the tax benefit of QIP. The CARES Act retroactively corrects the eligibility of QIP for bonus depreciation to Jan. 1, 2018. QIP placed in service after this date is 15-year property available for bonus depreciation. Lenders should discuss the tax deduction of improvements to nonresidential buildings with borrowers. Lenders should review Form 4562, Depreciation and Amortization, for QIP. The number of programs and provisions created in 2020 to mitigate the economic impact of COVID-19 can be overwhelming. Changes related to net operating losses, unused AMT credits, and the eligibility of QIP for bonus depreciation are three lesser-known items that could accelerate tax relief for your borrowers. For more information on these lesser-known programs and benefits, see “Tentative refunds under the CARES Act in 2020” in the July 2020 issue of the Journal of Accountancy or “Tax Practice & Procedures: Liquidity and Cash Management Strategies During a Pandemic” in the July 2020 issue of The Tax Advisor. The reasons to trust us with your SBA lending really stack up. Profit from people you can trust. Our SBA expertise helps you maximize your community bank’s earning potential. Our team becomes your team, managing and simplifying every step of the process, from loan packaging and closing, to securitization and sale, to portfolio servicing. All at no net cost to you. Talk to us today. 800.340.7304 www.holtandmon.com