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- Williamstown, NJ
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Made This Real Estate Tax Election Years Ago? It May Be Worth Another Look
Here’s one I don’t hear many investors talking about.
If your real estate business previously elected out of the Section 163(j) business interest limitation, you may want to pull that old return back out.
Why?
Tax rules have changed, and the IRS is giving certain taxpayers a temporary opportunity to withdraw a prior real property trade or business election. For some investors, an election that made sense a few years ago may not make as much sense today.
And there’s a clock on this. For eligible taxpayers, the withdrawal generally needs to be handled by the earlier applicable deadline, with October 15, 2026 serving as the outside date under the current procedure.
This is why I tell investors all the time: tax elections should not go on autopilot.
What worked for your portfolio three years ago may not be the best strategy today.
Anyone here actually reviewing old tax elections when the law changes, or do most people just keep carrying them forward?
- William Thompson
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- 609-820-0891