Discussion:Go zone act
From TaxAlmanac, A Free Online Resource
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Tax Questions --> Go zone act
Coolio2004 (talk|edits) said: | 13 October 2006 |
| I am interested in purchasing a building in New Orleans. It was not heavily damaged. I need a building for my business while the other building is being rebuilt. Would we get the 50% depreciation on the purchase price in 2007 when we take occupancy? Will this preclude us from getting 50% on the building costs for the new building we hope to occupy in 2008? The 2007 building will either be sold or turned into commmercial rental space. Also we have a location in Baton Rouge. I am interested in buying a building-we are currently renting. Would we get the 50% depreciation on purchase price for this building as well as any capital improvements? I know BR is in GO Zone just wasn't sure about buying existing buildings and making general capital improvements? | |
Taxguy1024 (talk|edits) said: | 13 October 2006 |
| If the building was occupied for ANY use prior to August 28, 2005, then no....you will NOT be able to take the 50% bonus depreciation on the cost of the building. You WILL be able to take the bonus depreciation on the new building being constructed (or reconstructed). The cost of the building that you now occupy in Baton Rouge will NOT qualify....but the cost of any improvements that you make to the building WILL qualify for the bonus depreciation. | |
| 1 November 2006 | |
| How is the 50% bonus depreciation taken on a new acquired rental property in a Go-Zone area? Would 50% of the house value be depreciated in year 1? | |
Taxguy1024 (talk|edits) said: | 1 November 2006 |
| If the property qualifies as "GO Zone property" (meaning it has not been used for ANY purpose prior to August 28, 2005 and you aquire it by purchase on or after that date) then yes...you depreciate 50% of the cost the first year and balance over the normal depreciable life of the property. But, unless you are a "real estate professional" you are subject to the passive loss limitations. | |
Taxguy1024 (talk|edits) said: | 3 November 2006 |
| And remember also that if you dispose of the property in ANY manner during the depreciable life of the property (even if its in a Section 1031 exchange) then you must recapture ALL of the excess depreciation. | |
To join in on this discussion, you must first
log in.
