Do you own commercial and/or residential rental property?
If you do, the recent Tax Cuts and Jobs Act provides some extremely nice benefits for you.
For starters, qualified businesses income from your rental creates a possible twenty-percent tax deduction… and without any effort on your part.
Plus, if you want to earn taxable income, the new law gives you enhanced bonus depreciation and Section 179 expensing!
Want to get the whole story?
Here’s just some of what you’ll learn when you
read this full after-tax-reform article.
- You’ll pay lower ordinary income-tax rates for 2018 through 2025. Our informative chart will show you just how much. Click for full details.
- Long-term capital-gains rates remain unchanged. We’ll show you the 2018 rates and brackets. See for yourself what you can expect to pay. Click for full details.
- Your basic write-offs are still intact. As under prior law, you can still deduct mortgage interest and state and local real-estate taxes on rental properties. Click for full details.
- There’s a new deduction for pass-through business income. For 2018 and beyond, the new act establishes a new tax deduction based on a non-corporate owner’s qualified business income from a pass-through business entity. Click for full details.
- There are liberalized Section 179 deduction rules for nonresidential buildings and property used to furnish lodging. For qualifying property placed in service in tax years beginning after December 31, 2017, the new law increases the maximum Section 179 deduction to $1 million (up from $510,000 for tax years beginning in 2017). Click for full details.
- Your 100 percent first-year bonus depreciation for qualified real- property expenditures doubles. For qualified property placed in service between September 28, 2017 and December 31, 2022, the law increases the first-year bonus depreciation percentage to 100 percent (up from 50 percent). Click for full details.
- There’s a new loss-disallowance rule. If your rental property throws off a tax loss (and most do, at least during the early years), things get complicated. The passive-activity loss (PAL) rules will usually apply. Click for full details.
- Like-kind exchanges are still allowed for real estate (but not for personal property). The new act continues prior law and allows real-estate owners to upgrade their real-property portfolios without taking a federal income tax hit by using a like-kind exchange (also known as a Section 1031 exchange). Click for full details.