BEST THING WE CAN DO TO HELP HARVY/HOUSTON

[Jay Hinrichs]

1. I would encourage everyone who has an interest in real estate to send an e mail to your Congressman or Senator asking them to implement another GOZONE  TAX  stimulus  like they did for Katrina

For those interest the Gozone was the Gulf Opportunities act of 2005.

what did it do.. .it created section 179 bonus deprecation for new construction in the affected areas and for rehab costs.

Since homeowners will get Fema benefits ( hopefully investors are SOL)  this Massive tax deduction will stimulate all sorts of investment into the affected areas.. and they may as well keep it going right down to FLA as well.. if that gets hit.

For all of you BPers who make post I quit my day job and are now real estate professionals you will qualify.. for all of you business owners in Houston you all qualify... Big company's and syndicators they qualify..

So how it works is

YOU  "investor" you buy a new construction house and put it into service right away as a rental you deduct the land cost say lot value in Texas is 20k you bought a new home for 200k.  Deduct 20k for lot leaving 180k for improvements..  then with section 179 you write off 90k first year.. if your in the 35% tax bracket or need loss carry forward the tax savings will pay for your down payment.. then you write off the rest as normal.... recapture is something to look at but 1031 is an option...

I personally bought 2.2 million worth of new construction in 2005 2006  there by writing off about 1 mil those two years and used those tax savings for my down payments. rather put it to the property than pay the tax  once you pay the tax it does you no good.

In MS and LA many many business rebuilt or bought new facilities which stimulated the recovery and this would happen here in Houston like it was on steroids I bet.

[Jay Hinrichs]

Others who would qualify if GOZONE bene's came back

Real Estate agents ( fulltime)

Loan officers  ( full time)

Apprasiers  ( I think )

Contractors

Also anyone who owns a business in the effected area

in addition I banged that post out quickly... any rehab money spent on existing structures one would write off 50% day one.

so a 50k rehab gets a 25k write off day one.. instead of 27.5  years.