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If you have REAL ESTATE investments, you are likely MISSING this tax savings.
ELEVATE YOUR CAP RATE via this tax loophole!
Everyone likes the tax benefits of real estate, but few talk about this huge one that is more relevant NOW than EVER.
***Thread***
ELEVATE YOUR CAP RATE via this tax loophole!
Everyone likes the tax benefits of real estate, but few talk about this huge one that is more relevant NOW than EVER.
***Thread***
1) For tax purposes, real estate costs are deducted over the useful life of the property.
All that means is if you buy a $1M property, you don’t get a $1M deduction the year you buy. You take it over 27.5 or 39 years depending on property type.
All that means is if you buy a $1M property, you don’t get a $1M deduction the year you buy. You take it over 27.5 or 39 years depending on property type.
2) If you think about in terms of net present value, you will eventually deduct the full $1M, but it’s spread out for decades, significantly diminishing the tax benefit.
3) Most other assets are deducted faster than real estate.
Most are around 7 years rather than 27.5 or 39.
Acceleration of deductions can significantly increase the net present value of tax savings.
Most are around 7 years rather than 27.5 or 39.
Acceleration of deductions can significantly increase the net present value of tax savings.
4) While most assets are deducted over 7 years, right now as part of recent tax reform, these shorter lived assets (anything under 20 year property) can actually be deducted in the year of purchase!
So that increases NPV even more!
So that increases NPV even more!
5) What does this mean for your real estate?
When you buy a property, some of it is NOT be structural to the property: movable walls, appliances, various fixtures, lighting, etc.
Up to 20% of the real estate purchase may not even be real estate from a tax perspective.
When you buy a property, some of it is NOT be structural to the property: movable walls, appliances, various fixtures, lighting, etc.
Up to 20% of the real estate purchase may not even be real estate from a tax perspective.
6) All of this could potentially be segregate into shorter-life assets and deducted MUCH faster.
...because of bonus depreciation, most of this could be deducted in the year of PURCHASE rather than 39 years.
...because of bonus depreciation, most of this could be deducted in the year of PURCHASE rather than 39 years.
7) Test what deducting 20% of your real estate purchase price in Year1 does to your cap rate!
Large companies ALWAYS do this with their real estate.
Shouldn't you?
Large companies ALWAYS do this with their real estate.
Shouldn't you?
8) If you found this post beneficial give it an RT to make sure others benefit, too.
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Grab my guide below for 60 more threads like this one, and save yourself $1,000s of tax or more per year! The price will never be this low gain so pick it up TODAY! https://gumroad.com/l/MbBbDf
