With the new tax bill in place lots of investors and even accountants are confused about the implications it has on real estate investments.
What are the new deductibles? How much can you claim as depreciation? I can pay my self a salary now?
All this and so many more questions are racing through people’s mind
So below are some pointers to help guide you through just some of the issues
- Barring rentals, mortgage interest deductions on debt is limited upto $750k starting January 1, 2018
- All forms of entities excluding C Corp will enjoy a 20% deduction from their net profit as long as your taxable income is under $157,500 single or $315,000 joint filing
- Section 179 has expanded from $500k to $1 million to include improvements to roofs, HVAC, alarms etc. To non-residential properties
- Depreciation limits have been dramatically improved for automobiles used for business and is retro active from 9/28/2017
- Salt deductions are the same but there is now a limitation of $10,000. These deductibles are not
applicable to schedule e, schedule c or schedule f.
- Deductions for personal casualties & theft losses are removed till 2025 except for ones declared
as federal disasters for example hurricane Harvey
- Here is a fun one. You can pay your kids more. The standard deductions has jumped from $6350 to $12,000.