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Leasehold Improvements Renewal Efforts Underway

For more than 10 years, a temporary provision in the depreciation rules has allowed a 15 year recovery period for the cost of making improvements to leased property. This rule expired as of January 1, 2010, however. Thus, unless Congress acts to renew and extend the provision, the cost recovery period is now 39 years, with the improvements being treated as part of the cost of the underlying real property. A Senate version of a jobs package is pending that would renew this (and many other) expired provision and make the 15-year recovery period available for all of calendar 2010.