Bonus depreciation in 2020 is an amazing tax benefit this year. I'm a buying a unit that cashflows well. I have cash for purchase. Here is my question:
Should I pay cash and close before end of 2020 then refi after? Or should I just do a traditional escrow and finance the purchase knowing that it will close in 2021?
What are the drawbacks of refinancing an after-cash purchase versus just financing from the beginning?
Rental Property Investor · North Texas · Member since 2019 · 3 posts · 1 vote
5y
Adam
Are you aware of the 0.5% fees (on loan amount) added to refinance transactions effective 12/1? If you were to refi in 2021, you need to take into account the additional cost. You can claim Bonus depreciation even if you place the asset in service in 2021.