APARTMENT ADVOCATE
NATIONAL APARTMENT ASSOCIATION
Bonus Depreciation on Fast Track; Tax
Extenders on Hold
T
he annual debate and process to extend a
number of temporary tax provisions of
interest to the apartment housing industry
continues. But no resolution is likely until
later this fall. Specifically, the House Ways and
Means Committee approved legislation on Sept.
17 to make permanent one of these so-called tax
extenders – bonus depreciation. It allows apartment
firms to expense 50 percent of the cost of a qualifying investment in the year it was purchased.
The end game for enacting tax extenders remains murky. On the House side, Ways and Means
Committee Chairman Paul Ryan (R-Wis.) has
indicated a desire to make permanent a number of
tax extenders. Under such a scenario, however, some
others may be extended on a shorter-term basis or
simply expire.
While the House wants to make certain extenders permanent, the Senate Finance Committee is
focused on a two-year package that takes care of
extenders for 2015 and 2016. Last December Con-
54 | TRENDS • OCTOBER 2015
gress retroactively extended them through 2014.
So they must be addressed again this year to allow
firms to claim them in 2015.
The following tax extenders would impact the
apartment housing industry most:
• Bonus Depreciation: Bonus depreciation
has enabled taxpayers to expense (as opposed
to depreciate over a number of years) 50
percent of the cost of a qualifying investment
(i.e. property with class lives or 20 years or
less) in the year it was purchased.
• Small Business Expensing: Under current
law, small businesses can expense, as opposed
to depreciate over a period of years, up to
$25,000 in new investments. This amount
is reduced as aggregate investments exceed
$200,000. For property placed into service
between 2010 and 2014, small businesse