Year after year, the Federal Government has continued to incentivize those who invest in Commercial Property. The IRS has established guidelines that, if ignored, cause commercial real estate investors to pay more in taxes than they should.
What guidelines are being ignored by Commercial Property Investors?
Those revolving around Accelerated Depreciation; known in the taxation world as Property Cost Segregation.
Ramifications of Improper Depreciation Allocation
Most commercial property investors do not truly understand the substantial benefits of accelerated depreciation. This is evidenced by our analysis of thousands of depreciation schedules over the years. We have found less than 10% of investors are properly depreciating their properties. The most common misconception is, “I am going to get this money anyway”. Is this a true or false statement?
Correct allocation of real estate depreciation is essential for Commercial Property Investors to effectively manage their tax situation. Are you one of the 90% who are missing out on opportunities that 10% of your competitors are capturing?
Nowadays, minuscule bank returns and a nervous stock market have many turning to other investments. Those placing their hard earned money (and credit) into the world of Commercial Real Estate Investment, need to know their tax incentive options, which mainly revolve around “depreciation”.
Every commercial property should be depreciated properly, especially for those generating positive cash flow. Furthermore, new construction properties over the past few years have additional “bonus depreciation” eligibility as well. At a time when tax rates are increasing, not going after these benefits can be quite costly.
DW specialists work with Commercial Real Estate Investors across the nation on maximizing tax incentives for their investment properties. If you have constructed, purchased, or renovated, commercial real estate over the past few years, let Rick complete a free analysis to determine your tax incentive opportunities.