Real Estate

Activity Grouping and the 20% QBI Deduction

For readers who own their office building, we recommended in the April 15th Newsletter the concept of “grouping” or “aggregating” the practice entity and the real estate entity in order to deduct the big real estate depreciation deductions against the practice income. This concept works on steroids with a cost segregation study that front-loads these […]

Cost Segregation Studies for Office Building Construction Become Even More Beneficial After Tax Reform

A cost segregation study is a hybrid engineering/accounting report that analyzes the construction costs of a commercial (or residential) construction project and reclassifies large components of them from a very slow 39-year depreciation period for a commercial building (27.5 years for a residential building) to much quicker 5-year, 7-year and 15-year depreciation periods. The point […]

Avoiding Passive Activity Loss Limits Through “Aggregation”

Watch Out for the Passive Activity Loss Rules that Limit Losses from Passive Investments Like Real Estate to Income From Your Passive Activities: The big up-front tax deductions from the real estate build-out will normally be limited to your rental profit. If you own your practice in one entity, say an S corporation, and you […]

Lease Protections You’ll Want as a Tenant

If You are Leasing Your Office From an Unrelated Third Party Landlord, Have Your Lease Provide For an Easy Transition in the Event of Your Death, Disability or Practice Sale:  A doctor’s lease should provide that upon death or disability, the doctor or the estate has the option of terminating the lease on reasonable (say […]

Are You a Hostage to Your Possessions?

One of the nice things about being successful is that you can buy the things you want.  But for many of us, as we get a bit older, we look to simplify our lives.  One drawback of owning valuable things is that they can be expensive or difficult to take care of.  There are plenty […]

TAX CUTS AND JOBS ACT OF 2017 – PART 3

This Newsletter continues the discussion of Tax Reform’s changes to businesses and will primarily cover the phenomenal new depreciation rules.  Perhaps the single biggest change in the entire Tax Cuts and Jobs Act is the move to 100% first-year depreciation for most business assets.  But, this isn’t all.  The new law makes major changes to […]

Beware HELOC Mortgage Accelerator Sales Promotions

The pitch is that their program will help you pay off your home mortgage over a short period of time through the use of a home equity line of credit (HELOC).  You will first borrow against your HELOC and write a check to your mortgage lender to prepay your mortgage.  Then, you will use the […]

Condo Conversions – What are They?

In a condominium, each of the units (apartments or professional suites) is owned individually.  Collectively, the owners of the individual apartments or units own the common space.  It is like buying a private home, except that there is some common property; i.e., hallways, elevators, reception area, etc. A condominium conversion consists of taking an existing […]

Lease Negotiations are Not Always Conducted On a Level Playing Field

The landlord is in the real estate business, and most doctors are not.  With some advanced planning, you can often negotiate a lower rent, receive tenant improvement allowances and maybe even get a few months of free rent. This is particularly true when moving into a new office, but it can also work when you […]

Should You Claim Depreciation on Your Home Office?

Yes.  We’re well aware that the thought of dealing with a depreciation recapture tax when you sell your home may make you queasy, but there are benefits to claiming depreciation deductions – and a big negative if you don’t.  First, the negative.  If you are taking the home office deduction, the government expects you to […]

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