USE BONUS DEPRECIATION BEFORE IT’S GONE
COMPLETE SMART UPGRADES
Review IRS Form 8582, Passive Activity Loss Limitations. If you actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. Investors may have built up a substantial number of suspended losses that can be used to offset future capital gains. Review this form to determine how much you have to work with and strategize which properties might make sense to sell in the upcoming year and offset taxable gain. USE PASSIVE ACTIVITY LOSS LIMITATIONS
Time to get an estimate on your taxes and see if it makes sense to do any upgrades and use cost segregation to save on 2023 taxes. Upgrades like solar with federal tax credits or city municipality water conservation methods are great ways to take advantage of savings and tax credits. Think about purchasing a property in an opportunity zone with a 1031 exchange to defer gains and receive deeper tax savings. Any and all improvements can be made through the end of the year for the spring rental market and for your 2023 tax write-offs.
The 2017 Tax Cuts and Jobs Act can save multifamily operators thousands on their taxes. Per the IRS, "Deduction applies to qualifying property acquired and placed in service after Sept 27, 2017." A five-year stepdown has started, making 2022 the last tax year offering 100% depreciation. In 2023, 80% depreciation can be taken against any new multifamily property and business equipment acquired and put into service during the 2023 tax year. Any unused portion of the depreciation can carry over for up to 20 years. Be sure to consult with your CPA for details to see if you qualify.
SEE IF IT MAKES SENSE TO DO ANY UPGRADES.
YOU MAY BE ABLE TO DEDUCT UP TO $25,000 OF LOSS.
2022 THE LAST TAX YEAR OFFERING 100% DEPRECIATION.
Elizabeth Campbell Real Estate Agent Lysi Bishop Real Estate Boise, ID Connect with Elizabeth
Jesse Bail e y Founder and Broker 49 Units Multifamily Brokerage West Palm Beach, FL Connect with Jesse
Joshua Christensen Qualifying Broker R1 Companies Real Estate Albuquerque, NM Connect with Joshua
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