Publication

Congressional Oversight Lifts After-tax Cost of Leasehold Improvements

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Due to an oversight in the new tax bill, the depreciable life for leasehold improvements—improvements to the interior of nonresidential real property, such as office build-outs— has reverted to 39 years from 15 years. As a result, the depreciation expense one is able to take for tax purposes is significantly reduced on a per annum basis, as costs are expensed over a longer time period.