The Internal Revenue Service (IRS) today issued Revenue Procedure 2020-25, which provides guidance for taxpayers affected by a recent technical correction to the Tax Cuts and Jobs Act (TCJA) clarifying that qualified improvement property (QIP) is classified as 15-year property. The change was enacted late last month as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136).

The IRS explains that its guidance instructs a taxpayer how to change its depreciation under Internal Revenue Code section 168 for QIP placed in service by the taxpayer "after December 31, 2017, in its taxable year ending in 2018 (2018 taxable year), 2019 (2019 taxable year), or 2020 (2020 taxable year)." The guidance also allows a taxpayer "to make a late election, or to revoke or withdraw an election, under section 168(g)(7), (k)(5), (k)(7), or (k)(10) of the Code for the taxpayer's 2018 taxable year, 2019 taxable year, or 2020 taxable year."

The 28-page text of Revenue Procedure 2020-25 is posted here.

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