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.
Here are a list of 5 tax incentive credits available to real estate investors that you should be sure to speak with your accountant about!
1️⃣ 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.
2️⃣ 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.
3️⃣ 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.
4️⃣ 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 to $20,000 a month (based on our clients) depending on the location. These leases are active for up to 30 years.
5️⃣ 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 segregation study was performed as well as allocating more of the purchase price to real property rather than personal property.