Ninety Percent of Real Estate Owners Over-Pay Federal Income Taxes

Article Via RISMedia

At least 90 percent of commercial property owners are paying too much in federal income tax because they fail to take the tax deductions that are available on real estate.

In analyses of property depreciation during the past four years, consultants found that at least nine out of 10 owners of commercial real estate were improperly reporting depreciation on federal income tax returns. As a result they paid too much in tax dollars.

IRS guidelines on depreciation are clear. They delineate which building components may be depreciated over a shorter life. The reclassification of short-life items into correct asset classes leads to higher depreciation and lower federal taxable income. However, many real estate investors and accountants disregard these IRS guidelines.

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