LET’S TAKE A BREAK…

LET’S TAKE A BREAK…

AND COST SEGREGATION STUDIES AND BONUS DEPRECIATION…

?

I have posted a number of articles about investing in real estate and getting Cash Flow, getting Appreciation, and, yesterday, I started a section about Saving Income Taxes when investing in commercial real estate.?A thought just occurred to me.?We normally think about Multifamily Housing, apartment buildings, and Office Buildings and Shopping Centers and the like as Commercial Real Estate.?But when you purchase a single-family residence and rent it out it becomes Commercial Real Estate.?So, the use of the property defines the property and not the nature of the asset.

?

Also, we have not talked about Cost Segregation Studies and Bonus Depreciation in quite a while.?This weekend my partner, Fred Sams, is going to Ft. Lauderdale, Florida for a conference in Cost Segregation Studies given by CSSI, Cost Segregation Services Incorporated.?They are one of the biggest and best Cost Segregation Study companies in the United States.?They are the company that we use for all of our Cost Segregation Studies.

?

It is now June 8, 2023.?The significance of this date is that we are coming up on the second half of 2023 and Bonus Depreciation will go down from the current 80% of the value of the assets to 60% of the value of the assets on January 1, 2024.?The Real Estate Professional and the Real Estate Investor will take a hit, but the Professional will be hurt more.?The Real Estate Professional can deduct all of the Bonus Depreciation calculated in a year whereas the Real Estate Investor is limited to an annual loss of $25,000.?So, that $25,000 loss should only be affected by how many years you can take the loss on your Income Tax Return, but the Professional loses a big deduction.

?

I have been around for a very long time, and I have seen a lot having been a Certified Public Accountant for over 50 years.?So, I have seen laws ending and I have noticed something very interesting.?Congress and the Internal Revenue Service cannot take away Bonus Depreciation after 2027 without taking away the incentive, the large income tax deductions, without bringing the real estate market to a halt.?That would hurt the economy and there would be some real consequences.?Consequences that would make some politicians unemployed!!!

?

So, the Government HAS To come up with something, in my humble opinion, to replace Bonus Depreciation or there will be an economic disaster on the horizon.?They will not call it Bonus Depreciation and I don’t care if they call it Mickey Mouse Depreciation.?All I am saying is that there will be SOMETHING and we have to look for it, learn it, and use it as a tool to save income taxes!!!

?

My name is Paul Levine and my partner’s name is Fred Sams.?We have expertise in Income Taxes as they are related to real Estate transactions and other situations.?We have expertise in Cost Segregation Studies and Bonus Depreciation.?We have several wonderful Real Estate related investments that give you a return on your investment that is unheard of!!!?And we are really nice people!!!?

?

You can reach me, Paul Levine, at (818) 298 – 4000 after 10 AM Pacific Time and you can reach Fred Sams at (619) 289 - 9401 Monday through Friday and, yes, even on weekends (It’s only me on the weekends).?I know that I am not supposed to say that, but I will answer the phone on weekends.?Our email address is [email protected], and our website is WWW.LSPROPERTYPARTNERSLLC.COM.?Both Fred and I look forward to helping you build your Real Estate portfolio and save income taxes!?