Tax Time – A Time to Examine Your Real Estate Holdings

Income tax preparation time is a good time to re-evaluate your investment real estate portfolio. Your IRS depreciation allowance on your income property is a key benefit that helps shelter your rental income from income tax.

Rental rates have increased significantly over the past several years, but the amount you can depreciate has remained constant.  If you purchased your investment property long ago, your depreciation allowance may be relatively low. This year, ask your tax consultant if it would be beneficial for you to exchange your current income property to another property of equal value in order to boost your depreciation allowance.

If the answer to this question is yes, give me a call. I will give you an evaluation of your current property, find you a suitable replacement property, and ensure the proper steps are taken in order to qualify for an IRS 1031 tax differed exchange.

IRS Depreciation of Rental Property Guidelines: http://www.irs.gov/publications/p527/ch02.html#en_US_2013_publink1000219255