Rev. Proc. 2020-25 provides relief for taxpayers to correct QIP depreciation methods and to retroactively make, revoke or withdraw certain depreciation elections related to the CARES Act technical correction of section 168.
The IRS on April 17, 2020, issued Rev. Proc. 2020-25 providing taxpayers the ability to amend tax returns and file accounting method changes to correct prior depreciation methods of so-called “qualified improvement property” placed in service after 2017. The revenue procedure also provides taxpayers a broader opportunity to retroactively make, revoke or withdraw certain elections with respect to all classes of tangible depreciable property under section 168 on returns filed prior to April 18, 2020.
“Qualified improvement property” (QIP) generally is any improvement made by the taxpayer to the interior of a nonresidential building that is placed in service after the building’s initial placed in service date. It does not include improvements related to elevators, escalators, building additions, or a building’s internal structural framework.
Read an April 2020 report [PDF 274 KB] prepared by KPMG LLP that discusses the relief provided by Rev. Proc. 2020-25
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.