{"id":97197,"date":"2022-05-17t00:00:09","date_gmt":"2022-05-17t04:00:09","guid":{"rendered":"\/\/www.g005e.com\/?p=97197"},"modified":"2022-12-22t00:40:12","modified_gmt":"2022-12-22t05:40:12","slug":"thinking-commercial-real-estate-think-fast","status":"publish","type":"post","link":"\/\/www.g005e.com\/2022\/05\/17\/thinking-commercial-real-estate-think-fast\/","title":{"rendered":"thinking commercial real estate? think fast."},"content":{"rendered":"

warn clients: do the deal, get the cost seg study, and claim the bonus depreciation before it sunsets.<\/strong><\/p>\n

\"\"
gonzalez:<\/strong> clients should act now, while the percentage of the allowed bonus depreciation is tipping in their favor.<\/figcaption><\/figure>\n

by julio gonzalez<\/em>
\nengineered tax services<\/a><\/em><\/p>\n

julio gonzalez, founder and ceo of engineered tax services<\/a>, has been named among the accounting today top 100 most influential people. gonzalez has been a pioneer in bringing specialized engineering tax studies to local cpa firms and mainstream america, which historically had only been available to fortune 500 through national accounting firms.\u00a0 engineered tax services also owns the growth partnership, able: crm for accountants, and inside public accounting.<\/em><\/h6>\n

alas, the 100 percent bonus depreciation rule\u2014the federal tax law under the tax cuts and jobs act (tcja) of 2017 that made it possible for taxpayers to write off a property\u2019s reallocation in the year of acquisition\u2014will begin to sunset at the end of this year.<\/p>\n

more in tax practice:<\/strong> new small firm cost seg opportunities<\/a> | what gig workers want<\/a> |\u00a0<\/strong>survey: big worries for u.s. and small business<\/a>\u00a0 | \u00a0working harder for every dollar<\/a>\u00a0 | \u00a0for a few: why busy season 2022 beats 2021<\/a>\u00a0|\u00a0\u00a0can the r&d tax credit be used to offset the amt?<\/a>\u00a0 |\u00a0\u00a021 reasons tax clients fire accountants<\/a>\u00a0 |\u00a0\u00a0unhappy about tax season?<\/a>\u00a0 |\u00a0\u00a0individual tax refunds up 13%<\/a>\u00a0 |\u00a0shut down the tax charlatans<\/a>\u00a0\u00a0 |\u00a0eight quick, easy ways to fix irs filing<\/a>\u00a0\u00a0 |\u00a0\u00a0a tax season worse than 2021?<\/a>\u00a0 |\u00a0\u00a016 traits of the best tax clients<\/a>\u00a0 |\u00a0irs under covid: heroes or goats?<\/a><\/p>\n

\"goprocpa.com\"exclusively for pro members.\u00a0<\/strong>log in here<\/a>\u00a0or\u00a02022世界杯足球排名 today<\/a>.<\/p><\/blockquote>\n

in its place in 2023, an 80 percent bonus depreciation will be allowed for properties acquired in 2023, scaling down to 60 percent in 2024 (for properties acquired in 2024), 40 percent in 2025 (for properties acquired in 2025), 20 percent in 2026 (for properties acquired in 2026), and then zero percent in 2027 and later years for properties acquired in 2027 and afterward.<\/p>\n

it\u2019s important to note for your clients in real estate that bonus depreciation is applied to a property based on the year it was purchased (although there are some exceptions to this rule). and taxpayers can only claim bonus depreciation retroactively within two tax years of the original placed-in-service date.<\/p>\n

acting during the year of acquisition is crucial<\/strong><\/p>\n

despite these forthcoming changes, 100 percent bonus depreciation is still the law of the land this year.<\/p>\n

thus, if your clients purchase a property this year, they might be wise to have a cost segregation study undertaken this year as well.<\/p><\/blockquote>\n

they can enjoy 100 percent bonus depreciation while it\u2019s still in effect and claim it on their 2021 or 2022 tax return.<\/p>\n

if they purchase a property next year, they\u2019ll only be allowed to take 80 percent bonus depreciation. they should consider that fact when weighing whether to make real estate acquisitions this year rather than next year.<\/p>\n

but whenever you decide to close on a property, the important consideration here is that it\u2019s in your client\u2019s best interest to commission a cost segregation study on their property in the year of acquisition; after that, the applicability of bonus depreciation is limited, and it will cost additional fees in order to incorporate it later, using form 3115.<\/p>\n

what a difference a year makes<\/strong><\/p>\n

let\u2019s say, for the sake of argument, that your client is on the fence about whether to buy a given property this year or next year. what could the lost 20 percent of bonus depreciation cost them over one year?<\/p>\n

to continue the example, let\u2019s pretend your client bought a property worth $10 million net of land this year. (the value of land doesn\u2019t depreciate like a physical building, so they can\u2019t depreciate the value of their property\u2019s land\u2014only their building\u2019s physical assets.) under 100 percent bonus depreciation, they\u2019d be able to get a 100 percent bonus depreciation deduction this year, amounting to their original purchase price of $10 million.<\/p>\n

but if they wait till next year to buy their investment property for $10 million (net of land), they could only take a $8 million bonus depreciation tax deduction on their 2023 tax return. in effect, they\u2019ve lost $2 million in tax savings for waiting a year because of the switch in bonus depreciation rules.<\/p>\n

take a similar example and apply it to a more expensive property that costs $50 million net of land. if they purchased it this year, on their 2022 return, they\u2019d capture the full $50 million in bonus depreciation tax deduction, but if they hesitate till next year, their $50 million in bonus depreciation deduction would shrink to $40 million. a potential $10 million in tax deduction would be lost. what a difference a year makes!<\/p>\n

real estate investors, take heed<\/strong><\/p>\n

the 100 percent bonus depreciation deduction has been a huge asset to real estate investors the past several years. today, there are conversations between the two political parties in washington to eliminate the four-year phase-out program, so 100 percent bonus depreciation may not be history yet.<\/p>\n

at this point, we must make our assumptions based on the laws we have on the books currently, and according to the provisions of the tcja, 100 percent bonus depreciation will vanish into the history books at midnight, dec. 31, 2022, and 80 percent bonus depreciation will kick in.<\/p>\n

if your clients are interested in taking advantage of today\u2019s more advantageous bonus depreciation rules before the tax benefit is phased out completely, i advise them to act now, while the percentage of the allowed bonus depreciation is tipping in their favor.<\/p>\n

real estate investors can still reap tremendous tax advantages these days.<\/p>\n

julio gonzalez<\/strong>, founder and ceo of engineered tax services<\/a>, has been named among the accounting today top 100 most influential people. gonzalez has been a pioneer in bringing specialized engineering tax studies to local cpa firms and mainstream america, which historically had only been available to fortune 500 through national accounting firms.\u00a0 engineered tax services also owns the growth partnership, able: crm for accountants, and inside public accounting.<\/em><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

\"\"<\/a>
\nwarn clients: do the deal, get the cost seg study, and claim the bonus depreciation before it sunsets.<\/strong>
\nby julio gonzalez<\/em>
\n
engineered tax services<\/a><\/em><\/p>\n","protected":false},"author":17,"featured_media":97199,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","footnotes":""},"categories":[3184,1905,1363,2269,3120,11,1906],"tags":[],"class_list":["post-97197","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-advisory","category-clients-and-service","category-featured","category-politics","category-pro-member-exclusive","category-research","category-tax-practice"],"acf":[],"yoast_head":"\nthinking commercial real estate? 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