len@qumix.UUCP (Leonard Labar) (10/15/85)
Does anyone have a feel for the effects of the Reagan tax law changes on depreciation for investement property? I own a home plus 1 rental and am considering buying more rentals. My tax man tells me the ACRS depreciation schedule has been changed to 16 years, will be 19 years next year, and 26 years the year following. To me it looks more and more like "straight line." My present strategy is to hold on to the properties rather than sell in 5 or 6 years. However, I also want to retire early which means I'll need the higher depreciation early in the game. My tax man advises to buy another property this year but I'm not sure if I can raise the rent next year to cover my expenses if property values drop like predicted. Confusing times... If someone has figure out the new "ACRS" schedule could they please post it to the net?
kurt@fluke.UUCP (Kurt Guntheroth) (10/16/85)
Most of the "simple" taxes currently proposed eliminate accelerated
depreciation of real estate. If I were looking at potential real estate
deals I would certainly not buy into anything that did not have a positive
cash flow before taxes. There are many people out their with eseentially
unprofitable real estate who rely on the tax laws to make their money. If
any of the new tax laws make it onto the books (ask your bookie for the
current odds) all this real estate is going to come onto the market very
suddenly, which will have a somewhat depressing effect on real estate
prices.
Remember, in these unsettled economic times there are NO safe investments.
--
Kurt Guntheroth
John Fluke Mfg. Co., Inc.
{uw-beaver,decvax!microsof,ucbvax!lbl-csam,allegra,ssc-vax}!fluke!kurt