8619 / Is there any relief for taxpayers who failed to make elections with respect to bonus depreciation for 2016 or 2017 because of the timing of the new tax reform law?

Yes. Some taxpayers expressed concern that the tax reform legislation’s changes to the bonus depreciation rules came too late for taxpayers to make the relevant elections on their 2016 or 2017 tax returns. In response, the IRS released guidance permitting taxpayers to revoke an election, or make a late election, for bonus depreciation with respect to certain property acquired by the taxpayer after September 27, 2017 and placed into service (or planted) during the tax year that included September 28, 2017.

For taxpayers who filed their 2016 or 2017 returns on time, and claimed additional 100-percent bonus depreciation for property acquired after September 27, 2017 and placed in service during 2016 or 2017 tax years, the taxpayer could (1) file an amended return changing (to revoke or make a late election) the election before the taxpayer filed its federal tax return for the first taxable year succeeding the 2016 taxable year or the 2017 taxable year or (2) file a Form 3115 with the taxpayer’s federal tax return for the first, second, or third taxable year succeeding the 2016 taxable year or the 2017 taxable year.

Taxpayers who wished to make the election to deduct 50-percent, rather than 100-percent, bonus depreciation, could change their election by filing an amended return or Form 3115 within the same time frames.¹ However, the preamble to the 2019 regulations makes clear that taxpayers cannot use the 50-percent election for some property and the 100-percent election for other property—the election, in other words, is all or nothing.