Commercial Real Estate Investors had reason to celebrate with the new Republican tax bill.
The New GOP tax bill gives many reasons why the undervalued Commercial Real Estate Investment is set to boom.
The bill, which includes deep tax cuts for corporations, reduces the tax rate and provides a steep deduction for some businesses structured as partnerships, limited-liability companies and other so called pass-through companies, which is how most real estate businesses are set up. Under the new law, investors in pass-through entities will benefit from a new 20% deduction.
Many businesses from an array of sectors are set to benefit from the deduction, since many use pass-through structures. Real estate investment is almost always conducted through such entities, so it will be a sector to benefit richly after the late-stage inclusion of property investment under the provisions of the bill.
In addition to the new real estate provision, the final tax bill will also lower the top tax rate for the richest Americans, like Trump and Corker, from 39.6 to 37 percent.
Build equity in Commercial Real Estate
Some commercial real estate, will benefit from the new law’s expanded coverage and scale of Section 179 of the United States Internal Revenue Code, which covers certain kinds of depreciation deductions. Specifically, Section 179 states that a taxpayer may choose to deduct the cost of certain types of property as expenses, rather than capitalizing the cost of the property. The new tax law will double the current dollar limitation on the amount that can be expensed each year from $500,000 to $1 million.
Now is the time when every investor should look at commercial real estate investing
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