NEW YORK CITY-Like a needle in a fractious haystack, the so called Tax Extenders Package was an easy-to-miss aspect of the newly passed Fiscal Cliff legislation. When Congress pulled the Bush-era tax cuts from the fire (at least for those people making less than $400,000), along with it came the Tax Extenders package.
“It was buried deep inside that huge package,” says Joseph Markling, managing director Strategic Accounts at CBRE and this year’s chairman of BOMA International. In a statement, the association pointed out that the provision permits building owners to depreciate leasehold improvements “over 15 years rather than 39, which more closely reflects the realities of a marketplace where leasehold improvements typically don’t last longer than 15 years before they’re replaced.”
Despite all of the limitations they did impose on higher-income individuals, Markling told GlobeSt.com in an interview , “they did not strip this out. This is a huge win for the industry.”
BOMA argues that the 15-year depreciation creates jobs and bolsters the economy, “since almost $250 billion is invested in commercial real estate improvements annually, with $15 billion of that amount going to leasehold improvements.”
Of course, Markling concludes, “in two months we’ll have to go through this whole thing again. It’s only a Band-Aid on a major wound. But we live to fight another day.”