Commercial Real Estate (CRE) investors, developers and owner’s buildings and improved property have been positively affected by the Tax Cuts and Jobs Act.
The most significant tax benefit is that Bonus Depreciation has been extended, expanded and increased to 100% (percent).
- The 50% bonus depreciation rate has been increased to 100% for qualified property acquired after September 27, 2017 on accelerated life assets of (5, 7, 15 years).
- Bonus Depreciation for ‘qualified property’ has been expanded to now apply “used property”, along with newly constructed buildings put ‘in service’ or acquired after September 27, 2017. [used property = acquisitions of existing buildings]
So, what does this really mean to CRE/building owners?
- This doubles the 1st year accelerated ‘bonus’ deduction benefit on new construction, property renovations/improvements, OR the newly included acquisitions that qualify as “in-service” on or after September 27, 2017.
- If this added depreciation cannot be utilized in year one, no worries, it will carry-forward for up to 20 years. Or, if the CRE is structured in a pass-through LLC, then the deductions could be ‘passed through’ to offset other passive income.
Whether you own apartments, a portfolio of residential rentals, medical office/facilities, mixed use, restaurants, strip centers, industrial/flex space, self-storage, greenhouses, car washes, etc; this will improve your cash flow and reduce your tax liability.
Let ELB help you determine how to maximize the tax benefits associated with your commercial real estate buildings. Email me today for a ‘no-cost’ Feasibility Analysis.