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The economic stimulus package that the federal government passed last month now allows businesses to write off the costs of specific improvements right away rather than spreading them out over the life of the asset. This is great for real estate investors because it means that if you spend money to improve your property, the cost will be a write off in the year that you pay for it.
This had previously been disallowed in the 2017 Republican tax bill. Many think it was a mistake, but congress has taken the opportunity to fix it with the stimulus bill.
Qualified improvements to your property can now help lower the taxation on your investments. The new bill also lifted the $500,000 limit on how many business losses taxpayers could use to write off taxes on non-business income, such as capital gains.
If we’ve said it once, we’ve said it a million times. Have a good relationship with a CPA already established so that you can discuss how this affects your business right away!
