If I make leasehold improvements to attract a better tenant to my small office building, how can I write them off?

Leasehold improvements made by either the lessor or lessee pursuant to a lease qualify for special tax treatment if placed in service (i.e., the work is completed) before the end of this year and certain other conditions are met. You can:

• Claim first-year expensing up to $250,000 (assuming you are profitable).
• Take 50% bonus depreciation (even if you’re not profitable).
• Depreciate costs (e.g., amounts over $250,000) over 15 years (rather than the usual 39-year period for commercial realty).

Talk to a tax advisor for the best way to write off your leasehold improvement costs.