Tax rules for real estate just changed. All property improvements now depreciate over 15 years instead of varying timelines, and you can write them off fully in one year until the end of 2022. But 1031 exchanges, which let you defer capital gains indefinitely, no longer work for business equipment.
Hey guys, it's Nate at Insight Tax. I want to tell you about some things that might impact you that were changes that came along with tax reform. All right, so we want to talk about depreciation first. You know, it used to be that in order to claim improvements, you had to figure out what category you had to class that as, either as 15-year, 20-year, restaurant property, retail property. All that stuff went away. Now it's all just considered 15-year improvements. Great thing is that you can also bonus depreciate or just claim the entire cost of those in the year that you do them up until the end of 2022. So that's good news, you get to claim it all in the current year. Okay, next thing I want to talk about is the 1031 exchange. The 1031 is still around. Good news for us real estate guys is that you still get to take a 1031 if you want to on any investment real estate. That defers your capital gain indefinitely. Okay, bad news though for you business owners, you can't do a 1031 anymore on business equipment. So, so-called personal property, which can be property that your business holds like equipment, a van, whatever it might be. You used to be able to do 1031 on that kind of stuff. You can't do that anymore. So might impact you if that was something that you were planning on doing. Sorry about that, but that's the way it goes. All right, if you guys have any questions, give me a call. You know where to find me.
