September 25, 2002—Within the U.S. Senate’s new $14 billion small business tax bill, jointly introduced by Senate Finance Committee Chairman Max Baucus (D-MT) and Senator Charles Grassley (R-IA), is a provision to change the time period over which leasehold improvements are depreciated, reports Building Owners and Managers Association (BOMA) International.
Leasehold improvements include changes to walls, floors, ceilings, lighting, and plumbing, to meet the needs of a new or existing tenant.
The proposed tax change would make qualified leasehold improvements eligible for a 25-year depreciation period, as opposed to the current 39-year time period, beginning in 2004. If this were to become law, it would mean a tax reduction for real estate of more than $2 billion over ten years.
BOMA will continue to track the progress of the leasehold improvements issue. For more information, contact Ron Burton at 202/362-6350.
Based on a report from BOMA International
