Benefits of Investing in Opportunity Zones, TCJA

The Opportunities Zones program enacted with the Tax Cuts and Job Act of 2017 offers three tax incentives for investing in certain low-income communities through a qualified Opportunity Fund: temporary deferral, step-up in basis, and permanent exclusion of capital gains. Under this provision, gain from the sale of any type of property that produces capital[…]

Real estate investor vs. professional- Why it matters

Income and losses from investment real estate or rental property are passive by definition — unless you’re a real estate professional. Why does this matter? Passive income may be subject to the 3.8% net investment income tax (NIIT), and passive losses generally are deductible only against passive income, with the excess being carried forward. Of[…]

The Fate of Vacation Rentals in Tucson with the onset of Commercial Taxation

Through the years, vacation rentals in many locations including Tucson have been popular for people who desire a private vacation experience or prefer a convenient short-term rental. However, developments in the last year brought what some considered a rather disturbing possibility to the forefront. Property Taxes During 2015, the Pima County Assessor reclassified hundreds of[…]

New Retail and Restaurant Remodel/Refresh Safe Harbor

The tangible property regulations have added increased complexity for many taxpayers. Although the new regulations are favorable to taxpayers in many instances, it can often be a headache to determine the correct treatment. In an effort to mitigate disputes regarding the deductibility and capitalization of remodel and refresh costs between the Internal Revenue Service (IRS)[…]

You’re a real estate investor, but are you a “professional”?

Income and losses from investment real estate or rental property are passive by definition — unless you’re a real estate professional. Why is this important? Passive income may be subject to the 3.8% net investment income tax (NIIT), and passive losses are deductible only against passive income, with the excess being carried forward. To qualify[…]

Comprehensive Analysis of Final Repair/ Capitalization and Proposed MACRS Disposition Regulations

(Source: CCH Incorporated) — The IRS’s long and tortuous repair regulation journey neared comple­tion with the issuance of final repair regulations in T.D. 9636 on September 19, 2013, and Rev. Proc. 2014-16 (I.R.B. 2014- 7, January 24, 2014) detailing the account­ing method changes needed to comply with the regulations. Unfortunately for taxpayers (and their return preparers),[…]

Why tax planning for real estate is becoming more important

As the real estate market slowly recovers and potential taxes go up for many, tax planning for real estate is becoming more important. Higher-income taxpayers could see the benefit of some of their home-related deductions reduced with the reinstatement of the itemized deduction phase-out as well as face higher income tax rates plus the new[…]