New IRS Repair Regulations for Real Estate Investors

March 3rd, 2016 at 10:04 AM

Owning a building has many headaches–such as new roofs, HVAC Units, lighting systems, etc., as they all eventually new replacement.

Prior law added to these unwanted events, as you were stuck capitalizing and depreciating the new roof-and continued to to depreciate the old one as well.

But today is a new day!!! Under current law, you can claim a deduction equal to the remaining basis of the component replaced; and in the process save additional taxes when you sell the building as there is no recapture of depreciation.

The new tax law requires one to make some calculations to break the building into separate components, and make a simple tax election.

Upon request, we can provide an example of how this double benefit works, and the huge tax savings that results.