If you’re a real estate investor, then the new Tax Cuts and Job Act (TCJA) of 2018 may have a direct impact on business and real estate investors. Many investors are starting to see how the new bill may affect their clients. The legislation has led to many questions about tax planning for real estate investors in Pompano Beach.
What to Know About 2018 Tax Planning for Real Estate Investors in Pompano Beach
The TCJA opened a new window of opportunity for investors and property buyers to enjoy a 100 percent first-year bonus depreciation deduction. It is retroactive for 2017 tax filings on property acquired and in service by September 2017. This break is available until 2022, that’s when it begins to be reduced by 20% per year until phased out. The bonus depreciation deduction on real estate improvements may apply to roofs, air conditioning and heating systems, ventilation, alarm systems, fireproofing and more.
A potential downside to the bill is that investors may not be saving as much money on home equity lines. Tax deductions for home equity lines have been nixed, and this goes for real estate investors with interest on home equity lines before the signing of the new tax bill. However, an upside is that now real estate investors may choose to create pass-through income, meaning that investors may decide to hold onto their property as opposed to selling in hopes of gaining an advantage through tax benefits and a higher sale value down the road. Again, because of the desire to hold onto properties, apartments and leasing offices may be the new direction for real estate investors to go.
There are many advantages and disadvantages when it comes to 2018 tax planning for real estate investors in Pompano Beach. Now, more than ever, it’s a great time to sit down with the professionals at Advanced Tax Advisors to ensure that you’re doing all you can to maximize your real estate returns, despite any tax law changes. If you’re concerned about your real estate investments, contact us today!