Understanding Depreciation Recapture Tax for Investment Properties
One of the tax benefits of owning real estate investment property is that you get to depreciate the building each year. It’s a way the US government incentivizes investors to buy property. In a sense it’s a loan. You get to take a tax deduction now saving on your tax bill but when you go to sell the property, you’ll have to pay tax on that depreciation. You might be able to potentially avoid paying that tax or at least kicking it down the road if you do a 1031 Exchange.
Here’s an excellent 8 minute video from real estate tax advisor and CPA, Brandon Hall.
If you are a real estate investor / building owner and you’d like to learn more about cost segregation and how it might help you save a lot of money on your income taxes, please feel free to reach out to me to discuss. I also have a cost segregation page here on this blog that might be of help initially.
About The Author
John Murphy
Husband of 34 years to my college sweetheart, Janet Murphy (@janetmurphydesign on Instagram). Together we have 6 wonderful children from ages 15-31 and 5 grandchildren. I’ve been a licensed REALTOR since 2003 and broker since 2007. I also am a cost segregation specialist helping building owners and real estate investors maximize their tax deductions, save thousands on their income taxes and increase their cash flow. If you’re a building owner you probably haven’t done a study…let’s connect. There is no obligation. We can run an estimate for you and really every building should be evaluated if the basis is over $150,000. I can work all over the country and not just here in the Upstate. We relocated to Greenville, SC for the lifestyle, lower cost of living, amazing amenities in the area and the growth opportunity for business and real estate. We absolutely love it here!
All opinions are expressly my own and do not represent either eXp Realty LLC, Cost Segregation Services, Inc. or any other company, organization or group that I might be affiliated with.