Magazine article Journal of Property Management

Tax Reform

Magazine article Journal of Property Management

Tax Reform

Article excerpt

IREM's Position: We support efforts to measure more accurately the depreciable life of buildings and conform amortization periods of tenant improvements more closely to the term of the lease. The current 39-year time frame does not accurately reflect the useful life of a building and its components. We support depreciation reform for nonresidential and residential real estate that secures a significantly shorter cost recovery period for commercial real estate without adding complexity or creating artificial acceleration of deductions, and specifically:

1. Upon recognition of capital gain, taxpayers should be able to use sales costs to first reduce the depreciation recapture portion of the gain;

2. Suspended losses should also go to reducing depreciation recapture;

3. An installment sale as gain is recognized over a period of time, a percentage of gain from appreciation and depreciation recapture is used in reporting gain;

4. A partially tax-deferred exchange gain from appreciation and depreciation recapture should be reported on an allocated-percentage basis and

5. …

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