Reference: CARES Act, 2020: Applies 2018 to 2023.

The CARES Act fixed a glitch in the TCJA of 2017 regarding leasehold improvements to nonresidential real estate if the improvement was placed in service after the date the building was placed in service. (Restaurant and retail improvements were left out of the TCJA).

The CARES Act restored Congressional intent that qualified restaurant and retail improvements were to have a 15-year recovery period.

WHAT DOES IT MEAN TO YOU? With a 15-year recovery period, qualified restaurant and retail improvements now qualify for 100% bonus (up front) depreciation through 2023. This means that if you make a qualified leasehold improvement, regardless of whether your business is profitable, that improvement can be depreciated in the year placed in service.