Discover the Power of Component Level Depreciation for your Property Investments
CONFUSED ABOUT WHAT TO EXPENSE VERSUS WHAT TO CAPITALIZE?
The Tax Cuts Jobs Act (TCJA) has done a lot to benefit commercial real estate owners and investors. Most notably in the changes to the depreciation schedule to allow for Bonus Depreciation on new construction, new improvements, and for property acquisitions (or used property) as the IRS has defined it. Including ‘used property’ in the bonus depreciation is also part of the TCJA.
WHAT IS BONUS DEPRECIATION?
In short, it allows you accelerate depreciation in the first year of ownership for property with a tax life of 20 years or less. The standard depreciation term for commercial property is 39 years, and for residential property is 27.5 years. To maximize the components under 20 years, one must..... |