Notwithstanding the permanent extension of Section 168(k), the ability to claim a 100% depreciation deduction on nonresidential real property under Section 168(n) provides a unique opportunity to deduct the entire cost of QPP that could affect capital investment decisions, tax planning, and financial reporting of companies.
Assessing the effects of the immediate deductions under both provisions not only necessitates a review of current and planned capital expenditures but also an analysis of potential downstream effects, such as the corporate alternative minimum tax (CAMT), the base erosion and anti-abuse tax (BEAT), the foreign-derived deduction eligible income (FDDEI) deduction, state income tax, attribute usages, and other related tax considerations.
Taxpayers also may want to communicate with government officials from the IRS and Treasury regarding identified issues as guidance for the Act’s provisions begins to be developed.
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