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Understanding Commercial Real Estate Depreciation

December 23, 2013

Depreciation is a familiar term to many tax filers, but for commercial property owners it can mean big savings. You can deduct the depreciation value in taxes each year that you own the property after 39 years. However, with that depreciation comes depreciation recapture, which occurs when you sell the property.

  • Depreciation b You can deduct what you rent. If itbs an office building, you can take those deductions to reduce your reportable income. So itbs in your best interest to rent out as much of the office space as you can. For investors, itbs an opportunity to buy a property they can use to supplement theirB portfolio.
  • Depreciation Recapture b When you sell your South Florida commercial real estate, you may have to pay a higher capital gains tax. Only the amount of deductions that you took in depreciation will get the higher tax percentage. Anything beyond that stays at the regular rate.

Taking advantage of depreciationB takes balance, butB financial planningB can help. AnB investor looking for commercial properties should have no problem putting depreciation to work. Contact Morris Southeast to get more information about what investments in South FloridaB commercial real estate can do for you.

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