Year-end tax planning for 2019 is in full swing. Thoughtful planning should be employed in order to maximize tax savings, monitor cash flows, and avoid tax penalties. The following are some important tax code tools that real estate owners should consider for their 2019 asset additions.
Bonus Depreciation – General
100% bonus depreciation for new and used property remains in effect for 2019. The percentage phases down from 2023 to 2026. Bonus depreciation is available for tangible property with a recovery period of 20 years or less.
Examples of property eligible for bonus depreciation are countless and varied but the following are some common items real estate owners can purchase that qualify:
• Carpeting (and in many cases depending on circumstances, various other flooring materials)
• Special electrical, plumbing and HVAC hookups for equipment