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Barrier Removal Tax Deduction

The Barrier Removal Tax Deduction, established under Section 190 of the Internal Revenue Code, allows a business of any size to expense up to a maximum of $15,000 per year of items that normally must be capitalized (depreciated). This deduction may be used for expenses associated with the removal of architectural or transportation barriers in association with a trade or business that complies with applicable accessibility standards.

The cost of an improvement to a business asset is normally a capital expense. However, you can choose to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who are disabled or elderly. You must own or lease the facility or vehicle for use in connection with your trade or business.

A "facility" is all or any part of buildings, structures, equipment, roads, walks, parking lots, or similar real or personal property. A "public transportation vehicle" is a vehicle, such as a bus or railroad car, that provides transportation service to the public (including service for your customers, even if you are not in the business of providing transportation services).

You cannot deduct any costs that you paid or incurred to completely renovate or build a facility or public transportation vehicle or to replace depreciable property in the normal course of business.

The most you can deduct as a cost of removing barriers to the disabled and the elderly for any tax year is $15,000. However, you can add any costs over this limit to the basis of the property and depreciate these excess costs.

The Barrier Removal Tax Deduction and the Disabled Access Credit can be used in combination if the expenditures qualify under Internal Revenue Code (IRC) Sections 44 and 190. In such a case, the deduction is equal to the difference between the total expenditures and the amount of the credit claimed. Both the tax credit and the deduction can be used annually. However, you may not carry over expenses from one year to the next and claim a credit or deduction for a previous year’s expense.

Additional Information

Additional information relating to qualified architectural and transportation barrier removal can be found in Internal Revenue Code Regulation 1.190-2, available online in PDF format (requires Adobe Acrobat Reader) at
http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/cfr_2003/aprqtr/pdf/26cfr1.190-2.pdf

IRS Publication 535, Business Expenses, contains detailed requirements related to use of this deduction. It is available online in PDF format (requires Adobe Acrobat Reader) at:
http://www.irs.gov/pub/irs-pdf/p535.pdf

See also:

Accessibility Tax Incentives

Disabled Access Credit

Source

Information for this topic was drawn from the IRS website at:
http://www.irs.gov/businesses/small/article/0,,id=113382,00.html
http://www.irs.gov/publications/p535/index.html

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