Tuesday Tax Tidbit: Leasehold, Restaurant and Retail Property Owners Must Act Soon

In January, Congress extended some depreciation-related tax breaks that can benefit owners of leasehold, restaurant and retail properties:

50% bonus depreciation. Congress extended this additional first-year depreciation allowance to qualifying leasehold improvements made in 2013.

Section 179 expensing. Congress revived through 2013 the election to deduct under Sec. 179 (rather than depreciate over a number of years) up to $250,000 of qualified leasehold-improvement, restaurant and retail-improvement property.

The break begins to phase out dollar-for-dollar when total asset acquisitions for the tax year exceed $2 million.

Accelerated depreciation. Congress revived through 2013 the break allowing a shortened recovery period of 15 — rather than 39 — years for qualified leasehold-improvement, restaurant and retail-improvement property.

If you’re anticipating investments in qualified property, you may want to make them this year to take advantage of these depreciation-related breaks while they’re available. It’s currently uncertain whether they’ll be extended to 2014.