Code section · 2014
Tax Increase Prevention Act of 2014, Section 125
Pub. L. 113-295, Section 125 (Dec. 19, 2014)
U.S. statute
Audio summary
A short audio walkthrough of this rule: what it says and why it matters for your study.
What it holds
Retroactively extended 50% bonus depreciation for property placed in service in 2014.
Why it matters for your study: This law kept 50% bonus available on cost segregation components placed in service in 2014. It was a one-year retroactive extension, signed in December 2014, that let taxpayers claim or amend for the bonus.
Where this comes from
After the 2013 extension from the American Taxpayer Relief Act, bonus depreciation lapsed again. Property placed in service during 2014 had no bonus protection for most of the year.
Congress passed the Tax Increase Prevention Act of 2014 in December of that year. Section 125 extended the 50% bonus retroactively to cover all of 2014. The pattern was familiar: a late-year or retroactive fix to a benefit that had technically expired.
What it established
Section 125 continued the 50% additional first-year depreciation under Section 168(k) for qualified property placed in service during 2014. The qualifying rules remained the same as in prior law. Property with a MACRS recovery period of 20 years or less, original-use, with the acquisition and placed-in-service requirements met.
This was a one-year extension only. After 2014, the bonus would again need another act of Congress.
How it shows up in a study
For property placed in service in 2014, a cost segregation study could produce a 50% first-year bonus on reclassified components. Because the extension was retroactive, taxpayers who had already filed their 2014 returns without claiming the bonus could amend those returns.
The year-end timing matters for planning. If property was placed in service late in 2014, the extension might not have been known when the return was originally filed. Late-year legislative action is one reason why keeping up with current law matters in depreciation planning.
What it does not mean
The 2014 extension was a one-year measure. It did not establish any permanent or multi-year bonus rate.
It also did not change the rules about what qualifies. Original-use property only. The building shell itself still got no bonus. Only the short-life components a study properly identifies could qualify.
Primary source
Read the official text for yourself, or share it with your advisor.
- Category
- Bonus depreciation & expensing
- Applies to
- All property types
- Status
- Vetted
This page explains a tax authority in plain words. It is not tax advice for your situation. The way this authority applies to your property is reviewed by a licensed tax professional. Citation is provided so you or your advisor can read the primary source.