THERE IS A BETTER WAY TO DO IT!!!

THERE IS A BETTER WAY TO DO IT!!!

?I received a call this week from a very nice gentleman asking if we could help him build a self-storage facility here in Southern California.?Well, at one point in time I was in the business of building self-storage facilities and getting my clients some wonderful income tax benefits.?The income tax benefits that I could get the clients are so much better than anyone else can get because I am creative, and I use the Internal Revenue Code for my clients’ benefit and not for the benefit of the Internal Revenue Service.

?There is a way, and it has been done before and it passed the scrutiny of the Internal Revenue Service, to build self-storage facilities where you can get an enormous amount of Bonus Depreciation.?It’s all in the way you look at things and it’s also in the way that you build the facility.?I am really sorry, but I will not disclose the method of building the facility here because I would be giving away trade secrets and then everyone would just copy what we are doing.?I don’t make any money that way.

?What I can and will tell you is that the facility will yield much more than normal amounts of Bonus Depreciation and that’s really important for a number of reasons.?First, as of January 1, 2023, Bonus Depreciation was phased out from 100% to 80% of $1 million of Tangible Personal Property.?That’s a drop, for Real Estate Professionals, of $200,000 in Bonus Depreciation deductions and that’s a whole lot of money. ??And, you have to remember that on January 1, 2024, the phase out goes to 40% or $400,000 that would be lost.??But, proper planning, which I am a very STRONG proponent of, can maximize the Bonus Depreciation deduction from several different angles.

?This will also affect the Real Estate Investor who is not a Real Estate Professional because the $25,000 Passive Activity Loss that can be deducted each year can be carried forward for a longer time the larger the deduction is.?Taking a $25,000 loss at an income tax rate of over 30% when you consider Federal and State taxes, isn’t the worst thing that can happen to you either.

?So, the age old expression is “if there is a will, there is a way” stands true except that where I have a desire to achieve something for my client I won’t let the Internal Revenue Code stop me, I will still find a way, a legal way.?It’s not only will, but also creativity.?So, to go back to the original point, we can get you wonderful amounts of Bonus Depreciation depending on how you, WE, build a self-storage facility and you can get income tax benefits that will be significant and could last for years!!!

?Have a wonderful weekend and don’t forget to change your clocks on Sunday.?This may be the last time that we have standard time because Congress is seriously considering doing away with it starting next year.?Next week we will go back to talking about the income tax benefits of buying or selling commercial real estate.