IRS Releases Guidance for Changes in the CARES Act that Allows Partnerships to Amend 2018 and 2019 Tax Returns and Benefit from Bonus Depreciation

Today the Internal Revenue Service released Rev. Proc. 2020-23, which allows eligible partnerships to amend their 2018 and 2019 tax returns using Form 1065, to take advantage of bonus depreciation changes in the Coronavirus Aid, Relief and Economic Security (CARES) Act.

The CARES Act included a technical correction that retroactively allows Qualified Improvement Properties (QIP) to qualify for 100 percent bonus depreciation. Owners of Low-Income Housing Tax Credit (LIHTC) properties can also take advantage of the change and amend their 2018 tax return upon receipt of IRS Form 8609.

The amended tax return replaces any prior return (including any administrative adjustment request filed by the partnership) if the taxpayer files an amended return for 2018 by September 30, 2020. To be eligible to file an amended tax return for 2018 or 2019, the partnership must have filed the original tax return and furnished K-1s before April 8 of 2020.

We appreciate our clients and are working diligently to keep them up to date with accurate information in this challenging time.  Stay safe and please contact your Tidwell Group representative directly with any questions or concerns.

For questions, please contact one of our tax professionals today.