Rev. Proc. 2019-33

Where this comes from

The Tax Cuts and Jobs Act of 2017 expanded bonus depreciation to 100% and extended it to used property for the first time. This was a major change that affected every property acquisition after September 27, 2017.

The problem was that Section 168(k) comes with elections. You can opt out of bonus for a particular asset class. You can take a different percentage. You can make choices by asset class. In 2017 and 2018, some taxpayers made elections they later regretted. Others missed elections they wanted.

The IRS responded with Rev. Proc. 2019-33. It gave taxpayers a way to fix those election issues.

What it established

The procedure permits late elections and revocations for property placed in service after September 27, 2017. It spells out the specific elections covered: Section 168(k)(5) (certain plants), Section 168(k)(7) (opt-out election), and Section 168(k)(10) (50% election).

To use the relief, you had to follow specific steps, including either filing an amended return or using a change-in-accounting-method approach, depending on your situation.

How it shows up in a study

A cost segregation study on a building placed in service after September 2017 often identifies 5-, 7-, and 15-year components eligible for 100% bonus. But if the original return did not have the right election in place, you cannot simply add the bonus deduction.

This procedure is the fix. Your preparer can check whether a late election or revocation is available under this procedure, and if so, correct the election. That may unlock significant first-year deductions on the reclassified components.

What it does not mean

This is a relief provision for a specific period and specific elections. It does not apply to all bonus depreciation issues for all years.

For property placed in service after January 19, 2025, the OBBBA made 100% bonus permanent. Different rules apply. This procedure addresses the 2017-era transition, not current-law issues.