Fast and Furious – How the 2017 Tax Act may affect the commercial real estate industry.

 

“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “ . ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA,  CLICK HERE  AND PLEASE CALL ME.     520-975-5207 or email me walterunger@ccim.net.  .    VIEW ALL OF WALTERS LISTINGS.      Let me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE

 

By Mark Lee Levine, CCIM, JD, LLM (Tax), and Libbi Levine Segev, JD, MS-RECEM, LLM (Tax) | Mar.Apr.18

The dizzying pace of writing, discussing, reviewing, and passing the U.S. Tax Cuts and Jobs Act of 2017 has made it tougher to determine how its changes will affect the commercial real estate industry. Many of the 2017 tax act’s changes already started in 2018, but many issues will require further refinement to understand their idiosyncrasies. Many of the changes will sunset after 2025.

The 2017 tax act provisions apply to both individuals and organizations.

Under the new rules for individuals, those filing a single return making under $9,525, the rate on the taxable income is 10 percent. On the other hand, for those individuals with taxable income of more than $500,000, the reduced rate is set at 37 percent – slightly less than before.

For those filing joint returns, the 10 percent rate applies for a taxable income amount of under $19,050. The highest rate of 37 percent tax applies to those with taxable income of more than $600,000.

Beneficial Corporate Tax Rates

To address the issue of competitive tax rates for corporations, the 2017 tax act reduces the highest corporate rate from 35 percent to 21 percent, starting in 2018.

The expensing of capital expenditures and use of cost recovery has allowed a business taxpayer with qualified property to deduct the cost of most personal, nonresidential property, which was employed in business. Immediately before the 2017 tax act, this rule allowed taxpayers to deduct up to $500,000 of acquired, qualified, personal property rather than applying cost recovery to the property during a given number of years.

The 2017 tax act gives taxpayers even more immediate deductions. Under the provisions of the 2017 tax act, taxpayers may deduct up to $1 million for qualified property. The benefit of such current write-off is subject to limits, if the taxpayer acquired too much of the qualifying property. In such instance, the current deduction could be lost.

However, the phasing out of such property deductions was increased to $2.5 million under the 2017 tax act. If the $2.5 million amount is not exceeded, there is no reduction in the use of the current qualifying property write-off. For example, a taxpayer might place in service $800,000 and deduct the whole amount under the 2017 tax act.

Under Internal Revenue Code Section 179, most of the  property is nonresidential, business (personal) property, and not real estate. However, exceptions exist where qualified retail,  residential, and leasehold improvements may fall within IRC Section 179. Further, fire protection, air conditioning, and roof work also may fall within IRC Section 179.

Expensing Allowances

Under an additional rule under IRC Section 168, qualified taxpayers can write off 100 percent of capital expenditures for qualified new and used property for the taxpayer’s business use.

Exchanges

IRC Section 1031 has existed since the 1920s. Fortunately, members of the U.S. Congress concluded, under the 2017 tax act, that Section 1031 would not be repealed for real estate. However, the 2017 tax act did repeal the Section 1031 rule for exchanging personal property.

Carried Interest

In some instances, taxpayers have received carried interest in each project that they directed. In such cases, the taxpayers often claimed that any gain from the disposition of the interest was subject to tax at the long-term capital gain rate.

The 2017 tax act addressed this issue by holding that if the interest might otherwise be qualified for long-term capital gain, such interest would not be taxed as long-term capital gain unless the carried interest was held for a minimum of three years.

Alternative Minimum Tax

Ever since the passage of the Alternative Minimum Tax, many experts have asked why the AMT should exist. While the individual AMT was not repealed, Congress did repeal AMT for corporations, which is effective in 2018.

Similar to the 21 percent corporate tax rate, this change will make U.S. corporations more competitive globally, and more likely to want to undertake more business within the U.S.

Of course, there are many other changes under the 2017 tax act; commercial real estate professionals overall have plenty to celebrate. The new act will spawn new legislative proposals and refinements. Stay tu

 

 

Mark Lee Levine, CCIM, JD, LLM (Tax), and Libbi Levine Segev, JD, MS-RECEM, LLM (Tax)

Mark Lee Levine, CCIM, JD, LLM (tax), is a professor and chair holder at the Burns School of Real Estate and Construction Management, Daniels College of Business at the University of Denver. Contact him at mlevine@du.edu. Libbi Levine Segev, JD, MS-RECEM, LLM (tax) is a teaching assistant professor at the Daniels College of Business at the University of Denver. Contact her at libbi.levine@du.edu.

SEE IT ALL: https://www.ccim.com/cire-magazine/articles/2018/03/fast-and-furious/

ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA,  CLICK HERE  AND PLEASE CALL ME.     520-975-5207 or email me walterunger@ccim.net

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KASTEN LONG Commercial Group and AMA Events, Resources & Education For Apartment Owners

Timeline of Arizona from  900 BC – 2017     

WHY PHOENIX? AMAZING!!!  POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”

PHOENIX TOPS US IN POPULATION GROWTH (MORE THAN LA, NYC) AND WHY THAT’S GOOD FOR THE ECONOMY, BUSINESS

FROM ME:                                                                      

Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land  Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties. I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group.  I also sold  hundreds millions of dollars’ worth of  Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with  brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also internationalClick here to find out what is a   CCIM:   https://en.wikipedia.org/wiki/CCIM 

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ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA,  CLICK HERE  AND PLEASE CALL ME.     520-975-5207 or email me walterunger@ccim.net

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WEEKLY LAND CLOSING UPDATE / THROUGH March 9, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH March 2, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

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WEEKLY LAND CLOSING UPDATE / THROUGH February 16, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH February 9, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY LAND CLOSING UPDATE / THROUGH February 2, 2018 / Phoenix Arizona Metro, Maricopa County, Pinal County.

WEEKLY APARTMENT CLOSING UPDATE THROUGH March 9, 2018,  Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH March 2, 2018,  Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH February 23, 2018,  Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH February 16, 2018,  Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH February 9, 2018/  Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH February 2, 2018/  Phoenix Arizona Metro.

WEEKLY APARTMENT CLOSING UPDATE THROUGH January 25, 2018/  Phoenix Arizona Metro.

8 Reasons You Should Invest in Land

Timeline of Arizona from  900 BC – 2017                                                

WHY PHOENIX? AMAZING!!!  POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”

PHOENIX TOPS US IN POPULATION GROWTH (MORE THAN LA, NYC) AND WHY THAT’S GOOD FOR THE ECONOMY, BUSINESS

DOT – LOOP 202 / SOUTH MOUNTAIN FREEWAY / PHOENIX AZ – UNDER CONSTRUCTION

ARIZONA FACTS – YEAR 1848 TO 2013

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What is a CCIM.

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  • DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
  • The average age of the population is 34 years old.
  • The health cost index score in this area is 102.1. (100 = national average)
  • Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).

PHOENIX PROJECTED AS NUMBER ONE US HOUSING MARKET FOR 2017

LIST OF ECONOMIC DEVELOPMENT PROJECTS IN PINAL COUNTY, REVISED 2-14-17

Reasons to Consider me for Commercial Referrals – I have the Knowledge and Experience                                                                                                                         

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Walter Unger CCIM –  walterunger@ccim.net   – 1-520-975-5207  –  http://walter-unger.com

2016 Official Arizona Visitors Guide

Visit Arizona

Why Phoenix?  This is a very interesting article, you should read it, amazing, there were only 350 K people living in Phoenix in 1950

Timeline of Phoenix, Arizona history

Phoenix, Arizona

Facts of Arizona – year 1848 to 2013

Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.

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 Walter Unger CCIM, CCSS, CCLS

I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years.  If you have any questions about Commercial / Investment Properties in Phoenix or Commercial /  Investment Properties in Arizona,  I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us. 

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Walter Unger CCIM

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Kasten Long Commercial Group

5110 N 40th Street, Suite 110

Phoenix , AZ 85018

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The information in this blog-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.