How to Apply Section 179 to Commercial Real Estate and STRs
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- Опубликовано: 2 окт 2024
- As bonus depreciation phases out, Section 179 is becoming more relevant for those looking to immediately expense certain capital expenditures.
You’ll learn:
How to strategically use Section 179 to offset W-2 income
The limitations when held in partnerships
The recapture implications investors need to be aware of.
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It is a very good point that this is risky for smaller businesses with assets like vehicles, computers etc that may fall below 51% business use or go dormant at some point. Bonus depreciation is only recaptured on asset sale/ disposition where as 179 is recaptured when business use falls below 51%.
Adopt a capitalization policy of $5k and up
Ah,
Well this is significant for married individuals owning STRs that provide significant services with property owned through tenancy in common. It is crucial to elect qualified joint venture so they don't have to file at the entity level. Especially if they intend to use section 179 in excess of the income generated by the property to offet other odrinary income. Is my understanding correct? Awesome information. Thank you!
I don't know if that's specifically relevant to this episode of their podcast, but in general, the best option is to avoid owning a property in both spouses names, just have one spouse own the property. If you're in a community property state, it doesn't matter if both spouses own it (Google that to find out if your state is or not). But otherwise, usually you just want to avoid having both spouses listed as owners of the property.
@@tax-modern Agreed. Thanks for the response!
I’m impressed with your knowledge. Few tax professionals know these rules.