Have You Considered These 5 Tax Incentives & Credits?

[Julio Gonzalez]

Did you know that many real estate investors receive up to a million (or more depending on your investments) in tax incentives each year? Unfortunately, so many of these tax credits and incentives are overlooked. I put together a list of 5 tax incentive credits available to real estate investors that you should be sure to speak with your accountant about!

1. Energy Tax Incentives: There are many tax incentives available to developers, builders and owners with the two most common incentives being 179D and 45L. Properties that qualify as energy efficient could receive a tax credit of $2,000 per dwelling or unit.
2. Disposition of Assets: When you undertake demolition or renovate a building to tear out lighting, HVAC units, and other components, they are abandoned or retired from the building. As such, their book value can be treated as a business deduction.
3. Cost Segregation Study: A cost segregation study is a strategic tax planning tool that separates the assets that have a shorter useful life. This acceleration of depreciation helps to increase your cash flow to give you the ability to reinvest while reducing your tax burden.
4. 5G Rooftop Leasing: Property owners can lease out the rooftops of their commercial and multi-family buildings to 5G carriers and increase their revenue stream by $3,000 - $20,000/month (based on our clients) depending on the location. These leases are active for up to 30 years.
5. Minimization of Recapture Taxes: When you sell a property, you may have to pay some of the taxes that were deferred as a result of a cost segregation study. However, this can be minimized by keeping the property for 3-5 years after the cost seg study was performed as well as allocating more of the purchase price to real property rather than personal property.

Are you or your clients utilizing these tax credits and incentives?