Qualified Improvement Property
Qualified Improvement Property (QIP) includes interior upgrades to nonresidential buildings—like tile flooring, interior HVAC, and interior doors—placed in service after the building itself. While many believe they’ve already claimed these benefits, the truth is: much of the value is often left on the table or misclassified. Thanks to the CARES Act, QIP now qualifies for 15-year depreciation and 100% bonus depreciation, making it more important than ever to get it right. At MSC, we go beyond the basics with detailed, engineering-driven studies that uncover overlooked improvements and ensure every eligible item is properly identified—maximizing your tax savings and compliance.
What is a Qualified Improvement Property?
Qualified Improvement Property (QIP) includes non-structural interior improvements made to existing nonresidential buildings. These improvements can apply to both leased and owner-occupied spaces. Examples of qualifying improvements include drywall, acoustical ceilings, interior doors, plumbing, fire protection systems, and electrical work. Improvements that do not qualify include structural components, elevators, escalators, and any work done on the building’s exterior.
We Know Tax Savings Opportunities for Non-Residential Property
With recent tax law changes, it’s more important than ever to identify and quantify property eligible for QIP treatment accurately. A technical correction in the CARES Act reclassified QIP as a 15-year property, making it eligible for 100% bonus depreciation. This benefit applies to qualifying improvements placed in service in 2018 and beyond. MSC’s experts can help ensure your improvements are properly classified to maximize available deductions.
Additional Lookback Opportunities Still Available for Other Qualified Property
Qualified Leasehold Improvement Property (QLIP), Qualified Retail Improvement Property (QRIP), and Qualified Restaurant Property (QRP) are specialized categories of improvements that qualify for accelerated depreciation with shorter recovery periods. QLIP generally applied to improvements made between 2001 and 2017, QRIP from 2008 through 2017, and QRP also from 2008 through 2017. Although these specific designations have expired, taxpayers can still file Form 3115 to claim missed depreciation by making a change in their accounting method. MSC can help identify eligible improvements and navigate the lookback process to maximize tax benefits.
What We Promise:
Over 600 national and regional CPA firms trust MSC’s expertise to help navigate the complexities of cost segregation studies. We are fully committed to our clients’ success—providing partner-level guidance, in-depth audit support, and exceptional service throughout every phase of a project.
- Experience and Credentials: MSC has a proven 30-year track record, with engineering and tax expertise, and experience across various property types and industries.
- Audit Support: MSC stands behind their work and takes great pride in the quality they deliver. All MSC engagements include complimentary lifetime audit support.
- Comprehensive Analysis: MSC performs site visits and deliver thorough reports that go beyond just software-generated results.
- Integration with Tax Strategy: MSC collaborates with your CPA or tax advisor to align the study with your broader tax planning goals, including step-ups, 1031 exchanges, and repairs vs. capitalization considerations.
Let's Get Started.
Contact us today to find out how we can capture extraordinary tax benefits for all types of entities.