Property depreciation in the proposed Trump tax reform

[Yonah Weiss]

Can anyone shed light on how the proposed Trump tax reform would affect property depreciation.  Could this tax reform  retroactively take away the tax benefits for 2017?

[Chris Clark]

Originally posted by @Yonah Weiss:

Originally posted by @Jon Holdman:

That section deals with being able to expense big purchases for a business.  Normally big capital items (e.g., some big piece of equipment) have to be depreciated over multiple years.  Section 179 allows up to $500K to be expensed in the year you incur the expense rather then depreciating it over several years.   There's a limit of $2 million, though, and if you go over that, the $500K amount gets reduced.  The tax bill changes those numbers to $5 million and $20 million for tax years 2018 to 2023.  That's a huge benefit for companies that need to acquire a bunch of equipment or software.  Doesn't apply to most real estate, only leasehold improvements, retail improvements, or restaurants.

 Thanks for the clarity Jon. So this actually does have big implications for investors or companies who are accelerating depreciation on personal property ('5-year property' or sec. 179 property) through cost segregation. Would this apply to a purchase of a large commercial property? My impression was it does.

In it's current form it certainly could. From what I've seen so far they are talking about allowing bonus depreciation on assets with a life shorter than 20 years and making it available for used assets as well.