FTP Comments on Notice 2026-16, Interim Guidance on Special Depreciation Allowance for Qualified Production Property
TXCPA’s Federal Tax Policy Committee submitted comments to Treasury on Notice 2026‑16. The committee supported the new special depreciation allowance under Section 168(n) while also urging clarification on several issues that businesses and CPAs may face.
TXCPA's Federal Tax Policy Committee submitted comments to the U.S. Department of the Treasury on Notice 2026-16 regarding the new special depreciation allowance for qualified production property under Section 168(n).
While supporting the interim guidance and its goal of encouraging domestic investment, the committee recommended additional clarification on several issues that businesses and CPAs may face. These included clearer definitions of qualifying production activities, particularly for mixed-use facilities in industries such as foodservice, and more guidance on documenting and allocating eligible costs.
The letter also requested clarification on start-of-construction rules, phased projects and whether partial improvements or rehabilitations may qualify for the special depreciation allowance. In addition, the committee recommended exceptions to recapture rules in cases involving bankruptcy or involuntary conversions caused by disasters and expressed concern that the current rules for revoking elections under Section 168(n) are overly restrictive.
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