IRS Guidance for Electing Real Property Trade or Business

While the Tax Cuts and Jobs Act greatly restricts business interest deductions under section 163(j), it provides an exemption for an “electing real property trade or business.” In the last two months of 2018, the IRS published significant guidance addressing how to make the election and the impact of the election on property required, as a result, to use the Alternative Depreciation System. In this alert, we discuss (i) the mechanics of making the election and (ii) the effect of the election on depreciation, including for property placed in service before 2018.

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This client alert is intended as a source of information for clients and friends of Klein Hornig LLP. The content should not be construed as legal advice, and readers should not act upon information in this publication without professional counsel. This client alert may be considered advertising under certain rules of professional conduct. Copyright © 2019 Klein Hornig LLP, All rights reserved.