The new Tax Code, as I would write it, will do away with the deduction for depreciation of real estate, including capital improvements to real estate.
According to the IRS, depreciation is “an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property”. The IRS discusses depreciation in detail in Publication 946 - How To Depreciate Property.
Granted real estate values can go down, as we have seen a lot of in the last few years, due to market conditions. But this is the exception and not the rule.
By doing away with the depreciation of real property a taxpayer would no longer have to “recapture” depreciation when the property is sold, which would greatly simplify the process.
Along the same lines, so as not to distort the economic reality of the situation, I would also do away with Section 179 expensing of personal depreciable property on any income tax return.