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| Tax Change Affects Depreciation of Improvements and Renovations to Commercial Real Estate October 22, 2004, George Bush signed into law the "American Jobs Creation Act of 2004" which gives landlords a 15-year depreciation period for leasehold improvements, at least until January 1, 2006. Previously, commercial leasehold improvements had to be amortized over 39 years. After the September 11, 2001 attacks, Congress and the President enacted legislation where 30% of leasehold improvements to commercial real estate made after 9/11/2001 can be deducted in the year in which the expenses occurred. The balance of the improvements are deducted over 30 years. This applies only to non-residential real estate used in a trade or business. At the end of the lease term, the balance of any leasehold improvements that have not been depreciated is expensed.
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Copyright © 2006
Ben Frederick Realty, Inc
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