Commercial Investment

Real Estate Taxation

A little bit of tax knowledge can go a long way in increasing your profits. You benefit by having an understanding of how investment properties, and the income and losses these properties produce, are viewed by the Internal Revenue Service. It´s also good to know how losses can be used to offset the amount of gain to be reported on the disposition of a property.

We can help you in the following critical areas:
•	Identify the four Internal Revenue Code tax classifications of assets
•	Determine what tax classification should be applied given a commercial real estate property type
•	Understand what types of properties allow for cost recovery, capital gains, capital loss deductions, exchanges and installment sales
•	Identify the conditions under which cost recovery (depreciation) may occur
•	Calculate depreciable basis given a property's assessed land and improvement values
•	Determine the varying cost recovery percentages for a property given the acquisition and disposition dates
•	Identify the three types of income subject to federal taxation and provide examples for each
•	Describe how income and losses within the three types of income baskets are treated for tax purposes
•	Describe how passive losses are treated for tax purposes given the Passive Loss Rule
•	Know the requirements needed for an investor to qualify for the rental real estate loss allowance
•	Identify who is affected by the Passive Loss Rule
•	Understand the difference between gains and losses from capital assets and those from 1231 assets
•	Identify the tax treatment for short-term and long-term capital gains and losses