"Addressing the imbalance between overall building depreciation and leaseholder occupancy is a good place to start," says Appraisal Institute vice president of public affairs Don Kelly.
Rep. E. Clay Shaw Jr. introduced the bill in the US House of Representatives. "The Internal Revenue Code's cost recovery rules associated with leasehold improvements are an impediment for building owners needing to make such improvements," Clay explains. "As a result, after-tax costs of reconfiguring or building out office, retail or other commercial space to accommodate new tenants or modernizing workplaces is artificially high. This hinders urban reinvestment and construction job opportunities as improvements are delayed or not undertaken at all."
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