Healthcare

Under the Tax Cuts and Jobs Act, certain expenditures related to providing employee parking were deemed unrelated business taxable income and resulted in taxable income for nonprofit organizations. This provision was highly unpopular in the tax-exempt sector. It resulted in a tax burden for organizations that typically did not owe income taxes, and an increase in administrative burden, due to complicated and tedious calculations.

The Tax Cuts and Jobs Act (TCJA) made several significant changes to depreciation rules when it became law in December 2017. In the “good news” department, two provisions in the law provided increased opportunities for businesses—including physician practices, hospitals and other medical practices that own or lease buildings—to expense the cost of depreciable assets sooner. On the “not-so-good news” side of things, several types of building improvements will now be depreciated over longer periods when their costs exceed the limits for immediate expensing. In addition to the longer recovery period, the new law and related guidance have created some uncertainty over what improvements may qualify for the same-year recovery provisions.