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Why tenant improvements can mean a bonanza for landlords

July 1, 2013

Have your tenants made improvements to your rental property?

If the answer is “yes,” you may be in line for some hefty monetary and tax benefits!

You see, under Section 109 of the Internal Revenue Code, at the termination of a lease, the landlord gets the value of tenant (lessee) improvements completely free of taxes.

Want to learn how to be a winner at this profitable game? Easy. Just read my new article titled Tax Tips: Tenant Improvements Bonanza to Landlord.

Three ways our fact-filled article can help you:

  1. We’ll show you how to handle tenant improvements made in lieu of paying rent. If this is an arrangement you’ve made, you (the landlord) must consider the improvements to be taxable rent. Not good. But we’ll show you how to use Section 109 to mostly avoid the prepaid rent assertion. You’ll get all the facts when you read the full article.
  2. You’ll learn how to make money by lowering the rent. If you know your tenant is going to make improvements to your property, you may want to lower the rent. You see, lower rents usually mean reduced local and municipal gross-rental taxes and/or gross-receipts taxes. You’ll get the whole story when you read the full article.
  3. We’ll tell you how to avoid “related parties” problems. Rent payments between related parties are covered by rules that can negate the benefits of tenant improvements. This can cause you some real tax headaches. You’ll learn how to stay out of hot water when you read the full article.

Filed Under: Depreciation, Featured Articles, Rental Properties, Tax Planning

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