In 2004 congress changed the depreciation schedule for leasehold improvements from 39 years to 15 years.....for one year only. The reduced depreciation schedule expired on 12/31/2005. The extension of that provision was part of a larger tax package that was not enacted into law before year end '05. Tax reconciliation is expected to be a high priority this year and the National Association of Realtors will fight for extension of the 15 year depreciation schedule provision.