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News Sept. 23, 2020

Final regulations implement depreciation tax deduction

On Sept. 21, the Department of Treasury released final regulations implementing the 100% additional first year depreciation deduction authorized by the Tax Cuts and Jobs Act of 2017 that allows businesses to write off the cost of most depreciable assets in the year they are placed in service.

This deduction generally applies to depreciable assets with a recovery period of 20 years or less, such as machinery, computers, equipment, furniture and appliances. Qualifying property must be acquired and placed in service after Sept. 27, 2017. These final regulations clarify requirements for properties to qualify, including used property and outlined rules for consolidated groups and for components acquired or self-constructed after Sept 27, 2017, and for large self-constructed property on which production began before Sept. 28, 2017.

For details about claiming the deduction, view the final regulations and the instructions to Form 4562, Depreciation and Amortization (Including Information on Listed Property).

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