The IRS has announced a new guideline for restaurants and retailers who refresh their premises every 5 to 10 years.
They are now able to deduct 75% of their costs under the safe harbor, beginning January 1, 2014. The remaining 25% needs to be capitalized.
Typically under audit, disputes arose over what was deductible and what need to be capitalized and depreciated over time when the restaurant refreshed. So the IRS has now provided some guidance.
Now you know the financial benefit for all of those bulldozed McDonalds. This is huge savings for them.
Rev. Proc. 2015-56