Tim ftayer, a lessee of part of an oﬃce building from an unrelated lessor, made permanent improvements which had a useful life longer than the remaining term of the lease. fte improvements are not recovery property. Tim may amortize the cost of the improvement over the remaining term of the lease.

Question

Quizplus · Accepted Answer

According to IRS regulations, a lessee can amortize the cost of permanent improvements over the remaining term of the lease, even if the useful life of the improvement exceeds the remaining lease term. However, the improvements must not be considered recovery property, which includes items like equipment and furniture.

Tim Ftayer, a Lessee of Part of an Oﬃce Building