Improvements made to the interior portion of a nonresidential building are generally considered eligible for special tax treatment. These enhancements, excluding those to elevators, escalators, or structural elements, are typically categorized for accelerated depreciation. For example, renovations such as new flooring, interior walls, or updated plumbing within an office building likely fall under this category. These specific improvements do not include the enlargement of the building or the internal structural framework.
This classification offers significant advantages to building owners by allowing for faster cost recovery and potentially reduced tax liability. This accelerated depreciation can incentivize building improvements, leading to enhanced property values and overall economic stimulation. Historically, the classification and applicable depreciation periods for such improvements have undergone revisions due to evolving tax laws. Understanding the current regulations and their impact on potential investment returns is crucial.
