What is the class life for qualified improvement property under Section 179(d)(5)(B) in a commercial office building?
Ask Blue J any tax question, then go deeper. Follow up, add client-specific context, and explore the sources behind every answer with Blue J’s generative AI solution for tax research.
The class life for qualified improvement property (QIP) in a commercial office building, as relevant for Section 179(d)(5)(B), is determined by reference to the definition and treatment of QIP under the Internal Revenue Code and related guidance.
1. Definition and Recovery Periods
- Qualified improvement property is defined as any improvement made by the taxpayer to an interior portion of a building which is nonresidential real property, provided the improvement is placed in service after the date the building was first placed in service. QIP does not include improvements attributable to the enlargement of the building, any elevator or escalator, or the internal structural framework of the building.
2. Class Life
- The class life for QIP is not directly stated in Section 179(d)(5)(B), but is determined by reference to the class life tables and the statutory assignment under Section 168.
- Under Section 168(e)(3)(E)(vii), as amended by the CARES Act, QIP is assigned a 15-year recovery period for the General Depreciation System (GDS) and a 20-year recovery period for the Alternative Depreciation System (ADS).
- The class life for QIP is therefore 15 years for GDS and 20 years for ADS.
3. Supporting Guidance
- IRS Publication 946 and the MACRS Depreciation Guide confirm that QIP placed in service after 2017 is 15-year property under GDS and 20-year property under ADS.
- The IRS Cost Segregation Audit Technique Guide also confirms that QIP is assigned a 15-year recovery period for GDS and 20 years for ADS, and that the class life is 15 years for GDS.
4. Summary Table Reference
- In the MACRS tables, QIP is listed as 15-year property with a 15-year class life for GDS and a 20-year recovery period for ADS.
5. Conclusion
For qualified improvement property in a commercial office building, the class life is 15 years under the General Depreciation System (GDS) and 20 years under the Alternative Depreciation System (ADS).
This 15-year class life is the relevant period for Section 179(d)(5)(B) purposes for QIP in a commercial office building.
Was this answer helpful?
What Blue J customers are saying
“We are excited to use Blue J to elevate the initial work product our team is able to produce."
"We’re incorporating Blue J to ensure our people are well-equipped with a research tool that delivers on both ease of use and quality of deliverable. It will save us a lot of time as a starting point, so we can focus our efforts on the analysis. Ultimately, it helps us get to the right answer, faster.”
"We’re incorporating Blue J to ensure our people are well-equipped with a research tool that delivers on both ease of use and quality of deliverable. It will save us a lot of time as a starting point, so we can focus our efforts on the analysis. Ultimately, it helps us get to the right answer, faster.”
"We had used Checkpoint for a long time but found it wasn’t particularly well-used in our practice."
"A lot of our practitioners would have to turn to Google to find what they were looking for, which of course isn’t ideal. Blue J is a real game-changer when it comes to this, since it combines the efficiency of Google with the authoritative tax materials our people really need to serve their clients best. At ELO, we pride ourselves on providing services that are focused on value for clients and exceeding their expectations. Adding Blue J to our toolbox will enable us to do just that, as we continue to evolve our service offerings to better serve our clients’ needs.”
"A lot of our practitioners would have to turn to Google to find what they were looking for, which of course isn’t ideal. Blue J is a real game-changer when it comes to this, since it combines the efficiency of Google with the authoritative tax materials our people really need to serve their clients best. At ELO, we pride ourselves on providing services that are focused on value for clients and exceeding their expectations. Adding Blue J to our toolbox will enable us to do just that, as we continue to evolve our service offerings to better serve our clients’ needs.”
"We find this tool to be a game-changer for us and our clients.”
“We had the opportunity to pilot some other AI solutions in the market, and found that the improvement over traditional search was limited - except in Blue J’s case, where the efficiency gain over traditional research methods is significant."
“We had the opportunity to pilot some other AI solutions in the market, and found that the improvement over traditional search was limited - except in Blue J’s case, where the efficiency gain over traditional research methods is significant."
“Blue J is an exciting technology because it enables the practitioner to remain in the driver’s seat of the analysis."
"Thoughtful functions are included to encourage and facilitate deeper analysis, not to replace or reduce it. We’ll continue to find new and impactful ways to leverage the technology, which has benefited our clients and staff alike. At RSM we strive to be compelling to our clients and to be digital by embracing new technologies to fulfill that promise.”
"Thoughtful functions are included to encourage and facilitate deeper analysis, not to replace or reduce it. We’ll continue to find new and impactful ways to leverage the technology, which has benefited our clients and staff alike. At RSM we strive to be compelling to our clients and to be digital by embracing new technologies to fulfill that promise.”
"We wanted to have a tool that people were using at all staff levels."
"We wanted something that lived up on their third screen - something that would be available and helpful to them every day. What we've found is it's been easy to get people to get into the habit of using Blue J because it helps people. Blue J allows us to quickly respond to client questions in a way that they can understand it, which helps us deal with the volume of client questions that come in. We were up and running very quickly with Blue J - within 5 minutes, our staff understood how this will be helpful, and the rest of the training program is refining prompting skills and building use cases and best practices."
"We wanted something that lived up on their third screen - something that would be available and helpful to them every day. What we've found is it's been easy to get people to get into the habit of using Blue J because it helps people. Blue J allows us to quickly respond to client questions in a way that they can understand it, which helps us deal with the volume of client questions that come in. We were up and running very quickly with Blue J - within 5 minutes, our staff understood how this will be helpful, and the rest of the training program is refining prompting skills and building use cases and best practices."
