Tax Relief, Unemployment Insurance
Reauthorization and Job Creation Act of 2010
The tax act that was signed by President Obama last week included several depreciation provisions that further enhance the benefits of cost segregation. Cost segregation can allow you to utilize these changes for real estate by reclassifying property to qualifying lives.
These lucrative tax breaks will increase cash flow for commercial real estate companies as well as other business that own real estate such as medical practices, manufacturers, day care facilities and restaurants.
Taxpayers now have many options to accelerate recovery of equipment and capital improvements. Proper planning is critical for optimizing deductions under the various options.
Give us a call at 732.548.3855 to learn more about these lucrative tax benefits and how to properly apply them to your client's tax returns.
Bonus Depreciation
100 Percent First Year Bonus Depreciation created for qualified improvements made after September 8, 2010 and before January 1, 2012. Bonus depreciation reverts back to 50 Percent for qualified 2012 improvements.
Code Sec. 179 Expensing Limits
The Code Sect. 179 expensing limits were raised to $125,000 with a $500,000 investment limit for 2012.
The 2010 Small Business Jobs Act, which was signed in September, raised the expensing limits to $500,000 with a $2 million investment limit for 2010 and 2011. It also permitted, for the first time, expensing of up to $250,000 of Qualified Real Property, such as qualified leasehold, restaurant or retail improvements. The expensing of Qualified Real Property was not extended in the new tax act.
15-Year Recovery Period for Qualified Improvements
The 15-year recovery period was extended through 2010 and 2011 for:
- Qualified leasehold improvements
- Qualified restaurant improvements, and
- Qualified retail improvements.
The 15-year recovery period previously expired at the end of 2009.
