Quote:
Originally Posted by New Era
Some questions on this, because it seems sketchy. The properties have to be used for business and you only get to claim the value of the structure and not the land, correct? You have to be able to prove they are for business purposes, yes? In the example suggested, the individual gets to claim a deduction of $370K for 27 years, meaning the entire cost of the property is recouped in that time ($370K x 27 = $9.9M). Then the interest gets to be written off as a business expense, so at today's rates that would be $6.7M on a 30 year mortgage, or $224K a year? So without any revenue generation the property has has a tax avoidance value of $594K in the first year with a light drop each subsequent year? The mortgage on the full $10M is only $609K a year. That can't be right.
|
The scenario we used didn't account for the value of the land which can't be depreciated, but after that you are not far off.
You can also add in almost all other expenses and deduct those as well.
Mortgage insurance, property taxes, repair and maintenance expenses, home office expenses, insurance, professional services, and travel expenses related to management are all deductible in the year you spend the money.
The more I read about this the crazier it sounds.