November 1, 2016
Commercial buildings and improvements generally are depreciated over 39 years, which essentially means you can deduct a portion of the cost every year over the depreciation period. (Land isn’t depreciable.) But enhanced tax breaks that allow deductions to be taken more quickly are available for certain real estate investments:
Although these enhanced depreciation-related breaks may offer substantial savings on your 2016 tax bill, it’s possible they won’t prove beneficial over the long term. Taking these deductions now means forgoing deductions that could otherwise be taken later, over a period of years under normal depreciation schedules. In some situations — such as if in the future your business could be in a higher tax bracket or tax rates go up — the normal depreciation deductions could be more valuable.
For more information on these breaks or advice on whether you should take advantage of them, please contact us.
If you’re among the families with less exposure to estate tax liability post-TCJA, it’s time to adjust your estate planning strategy to concentrate on reducing income taxes. If state income taxes are a concern, one tool to consider is an incomplete nongrantor trust.
Family businesses often depend on their founder to maintain the company’s success. But eventually that owner will have to depart the business. Depending on the circumstances, the family itself may be thrown into chaos. A solid succession plan can help prevent this.
If you’re thinking about giving holiday gifts to employees or customers or throwing a holiday party, be sure to consider the tax consequences, both for you and for the recipients of your generosity.