On March 27, 2020, the United States Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The "CARES Act" includes a revision to the tax code to ensure "qualified improvement property" (QIP) investments can benefit from an accelerated tax deduction. QIP refers to certain qualified improvements to an interior portion of an existing building that is nonresidential real property made by the taxpayer.
Under Section 168 of the tax code, the cost of fire alarm systems and security systems (among other items under QIP) can be 100% deducted for tax purposes in the first year it's placed in service, instead of over 39 years. Building enlargements, elevators, escalators, and internal structural framework improvements would not qualify for QIP. For commercial buildings, the cost of fire alarm systems and security systems placed into service in 2020 possibly can be fully deducted as a business expense under the CARES Act.
- Take 100% depreciation year one for full equipment and labor costs.
- There is no limit on the cost amount of equipment and labor.
- A deduction can be taken back from January 1, 2018.
BLTI offers a wide array of services that fall under the CARES Act Section 168 including; access control, CCTV, security camera systems, CyberLock, monitoring, fire systems, and intercom systems.
Disclaimer: The information provided in this article is intended for general information only. Please consult with a tax advisor before making any business decisions that could affect your tax situation.
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