The benefit of the GO Zone for real estate investors is the first year 50% Bonus Depreciation. The following examples are not to be considered tax or legal advice. Please consult your tax professional as your personal circumstances will vary.
50% Bonus Depreciation Example
This special deduction is equal to 50% of the qualified property's depreciable basis in the first year.
$178,000 (Approximate New Home Purchase Price in the GO Zone)
-$ 34,000 (Approximate Land Value, not depreciable)
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$136,000 (Total Improvement for Depreciable Basis)
$ 68,000 (1st Year 50% Bonus Depreciation per property)
Real Estate Professional Example
Gross Income: $400,000
Business Expenses: $100,000
Net Business Income: $300,000
Less Personal
Exemptions: $ 50,000
Net Income: $250,000
Federal Income Tax (MFJ) $ 62,481
Cost to Invest in
3 Homes in the GO Zone: $ 65,124
GO Zone Tax Savings: $ 56,486
New Tax Bill: $ 5,995
Contact Us to consult with you personally about how to transfer most of what you would pay in taxes into home equity in the GO Zone.