These are the leaves of a plum tree at the new home we bought in February. It was barren then, though we anticipated getting the sweet fruit in the summer. In the early spring it came out with lots of blooms. We were thrilled. However, a late snowfall did most of our blooms in. Still, we were hoping for a small yield of plums and the tasty fruit.

Then we had an unprecedented season of Japanese Beetles. They were everywhere, devoured everything. We could not stop them. They decimated our plum trees, eliminating any opportunity for fruit. Leaving the entire tree and its leaves looking like lace (see picture). They did the same to our Rose bushes, Hosta’s, Banana trees, and many other plantings. Ugh…

You may be wondering, what in the world does this have to do with tax incentives and 100% Bonus Depreciation? Well, Federal taxes can eat away at your cash flow, the sweet fruit of real estate investment. This added cash flow allows for new investment to grow your portfolio. If you would rather the federal government to invest your money for you, then your yield may look like these plum tree leaves.

By utilizing 100% Bonus Depreciation, your property will deliver significant federal tax deductions. This lucrative tax strategy has been around for years. Having 100% Bonus on acquired properties since September 28, 2017 just makes the fruit that much sweeter.

We can even do a “look back” study to capture any lost opportunity of not doing a cost segregation study on your property investments. It’s like the fruit having been in cold storage. It can be taken in the current tax year to benefit you. 

If you are not aware, 2022 is the last year for 100% Bonus Depreciation and this sweetened commercial real estate tax strategy. Over the next 5 years, bonus depreciation is gradually scaled back by 20% per year. Even so, utilizing accelerated depreciation straight up will yield excellent tax benefits for income producing commercial real estate. We did this for 17 years before 100% bonus was passed in the Tax Cuts Jobs Act.

If  you are unaware about this tax strategy and want to learn more about this fruit of commercial real estate investment, reach our to us at info@elbcostseg.com.

Thanks for reading, Bill Smith