Fixing Qualified Improvement Property

The Issue

The Tax Cuts and Jobs Act (TCJA) of 2017 combined the definitions of leasehold, restaurant and retail improvement property into “qualified improvement property” (QIP), but the language granting those property types a permanent 15-year depreciation period, as intended by Congress, were accidentally left out of the final bill. This resulted in two problems. First, the depreciation for interior improvements has reverted to 39 years, up from 15 years. Second, the tax bill also allowed for temporary 100% depreciation (until 2022) of property with a class life of 20 years or less, but this error prevents QIP from being fully expensed.

BOMA Position

BOMA strongly urges Congress to provide a technical correction to the property depreciation period on QIP as 15 years and the inclusion of QIP as eligible property for 100% bonus depreciation. As building owners negotiate leases with tenants, QIP is considered while determining tenant improvement dollars. Those dollars bring in building trades such as painters, carpenters, plumbers and electricians. With less money for tenant improvements, local jobs will suffer. According to the conference committee, QIP was intended to be depreciated at 15 years, qualifying for bonus depreciation.

Specific Ask

Support any efforts to correct the Qualified Improvement Property drafting error and return QIP to a 15-year depreciation period retroactively and grant it temporary 100% bonus depreciation until 2022 as intended.

For more information please contact: Emily Naden, Director of Federal Affairs, BOMA International, 202-326-6326,

Fixing Qualified Improvement Property One-Pager PDF

  • Qualified Improvement Property (QIP), formerly leasehold depreciation, has reverted to 39-year depreciation from the 15-year period intended by Congress, through a drafting error TCJA.
  • The need for a technical correction is openly acknowledged by both parties and both chambers.
  • Both the Internal Revenue Service and Department of the Treasury await Congressional action to correct this error.
  • The Joint Committee on Taxation (JCT) scored TCJA to include 15-year depreciation for QIP. This fix is already paid for.