Trump tax plan question

[Marcus Johnson]

I understand that we as RE investors will benefit from the drop of our tax rate on rental income and other investment incomes from 35% to 20%.   But my question that I haven't been able to find an answer to, is what will happen with the depreciation for 27.5 years?   

[Brian Schmelzlen]

Originally posted by @Tom Conant:

Waiiiiit a sec. I am looking into setting up my business entity right now. While double taxation is in play for C corps, would it be to my advantage to orchestrate a C Corp (rather than other business structures) to reap the benefits of this tax reduction?

Thanks for the help!

Tom

It depends specifically upon your situation, but generally no.

At a minimum you will still be taxed at a 20% rate.  If you are pulling money out you will either be subject to double taxation, or take money out as wages and pay a blended rate between the 20% corporate rate and your ordinary income rate.

It depends on whether the House bill or Senate bill wins out on a few different areas, but you still might be better off as an LLC or S-corp (depending upon what you want to do with the business).