ATTN: Real Estate Professionals
WRITE OFF 50% of New Properties' Cost in First Year
GO-ZONE BONUS DEPRECIATION EXTENDED THROUGH 2010
SENATE TO PASS HR 4213 THIS WEEK
Applies to newly constructed property located in five Coastal Mississippi counties to assist in rebuilding the Coast from Hurricane Katrina.
Yes, originally scheduled to expire on December 31, 2009, the first year 50% bonus depreciation deduction has been extended through December 31, 2010. If you qualify as a real estate professional, this can reduce your 2010 income taxes by as much as 17% of the new properties' cost, In addition, any tax loss generated by the bonus depreciation in excess of 2010 taxable income can be carried back as a net operating loss for a period of five years permitting investors to obtain refunds on prior years' taxes already paid. Our friends on Capitol Hill, with whom we have worked closely to obtain this extension, assure us that this will be the FINAL extension of these benefits!
Construction has just begun on Phase 2 of the Meadows of Gulfport duplex community located in Gulfport, Mississippi within the specified GO-Zone region. Construction on all of the remaining twelve duplex properties will be completed in the late third or early fourth quarters of 2010 making the product eligible for this 50% first year write-off. The bonus depreciation is NOT subject to alternative minimum taxes that usually offset the income tax benefits available to real estate investors.
The twelve unsold properties are now being marketed on a pre-construction basis. Each of the units consist of three bedrooms, two baths and contain approximately 1,200 SF per dwelling. Pre-construction pricing on these twelve duplexes is now available. If you are interested in residential investments located on the Mississippi Gulf Coast where over 30,000 residences were destroyed in Hurricane Katrina AND you have a desire to reduce or even eliminate your 2010 federal income tax liability, contact us for more information in this regard.
Lastly, the GO-Zone regulations are fairly complex and there is a tremendous amount of misinformation concerning the specifics. A word of caution…very, very few realtors understand this legislation. In fact, relatively few CPAs or tax attorneys outside of the Gulf Coast even understand all the details surrounding this beneficial program. Fortunately, the Developer's CFO was a practicing CPA on the Coast for 20 years and can explain all the intricacies to interested investors and even work with them one on one to evaluate the bonus depreciation's impact on their particular situation.
If you are a real estate professional (as defined in the tax code) and you have significant income tax liabilities, you owe it to yourself to check out a possible investment in the Meadows of Gulfport duplex development. A final consideration involves the permanent financing of this investment. As a professional, you probably understand that obtaining a mortgage on investment property in this environment is far more difficult than in years past. For that reason, investor's financial strength is tremendously important and should be considered in your evaluation.
Oct 17 '09, 02:07 PM
