COST SEGREGATION STUDIES…

PART II OF II… THE END...

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But BONUS DEPRECIATION says that you can deduct the cost of these items, and I will explain in a minute that Bonus Depreciation is in the process of being phased out.?When you add all of this up to over 20, 30, or 100 units or more apartment buildings, you have a HUGE number!!!?The trick is, very few Certified Public Accountants, Enrolled Agents, Commercial Brokers, or Realtors know that you also prepare a Cost Segregation Study when selling the property as well because you can turn ordinary income into capital gain income taxes at a lower rate!!!

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You should also know another thing about taking Bonus Depreciation. Bonus Depreciation is a deferral of income taxes; it’s not an income tax savings, per se.

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Please ask your Certified Public Accountant about this, but do not be surprised if he or she looks at you blankly. I just told you that your CPA might not know this, and if they want to appear knowledgeable, they might just tell you that this doesn’t apply to you. Don’t believe them—please don’t believe them.

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This creates what turns out to be an interest-free loan from the Internal Revenue Service for what could be a lot of money for quite a few years.?And, when was the last time the Internal Revenue Service did anything nice for you? NEVER!!!

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As I said, Bonus Depreciation is being phased out. As of December 31, 2022, you were able to deduct 100% of $1 million in Bonus Depreciation in one year. For 2023, it was 80%; for 2024, it is 60%. It goes down by 20% yearly until it is lost in 2027. Now, I said that I was a practicing Certified Public Accountant for over 50 years before getting into real estate.

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I have seen benefits like bonus depreciation be phased out before, and Congress and the government have always come up with something to replace it, and they will most likely do the same thing this time.?There is presently a bipartisan bill in Congress to extend Bonus Depreciation at 100% to 2027, but that bill has been circling the halls of Congress for a very long time.?How do you like that??I’ve been saying something almost exactly like that since they talked about totally phasing out the Bonus Depreciation rules!!!???If Bonus Depreciation is eliminated and not replaced, then real estate investors will slow down and stop their buying or building of commercial real estate and the real estate market, and, therefore, the economy will grind to a halt.?I don’t know what the new form of bonus depreciation will be or what it will be called, but I am guessing that the government will come up with something to replace it.

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Please Google any part of what I have written, and you will find out I have followed the law EVERY STEP OF THE WAY!!!

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My contact information is:

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Paul Levine

Telephone: (818) 298 – 4000

Email: [email protected]