Senate Republicans slipped a tax break for wealthy real estate investors into the $2 trillion coronavirus stimulus package
Charles Davis
Mar 27, 2020, 3:32 AM
The measure is "a potential bonanza" for wealthy investors, The New York Times reported, saving them $170 billion over 10 years.
It temporarily lifts the cap on the tax deduction for real estate depreciation, a boon to the top 1% of taxpayers.
"It's a pretty big deal," Peter Buell, of the accounting firm Marcum, told The Times.
A provision slipped into the $2 trillion coronavirus stimulus package by Senate Republicans enables wealthy real estate investors to reduce their tax burden, The New York Times reported Thursday.
Designed to benefit households with over $500,000 in nonbusiness income, the measure allows investors to apply on-paper losses from falling property values to their bill with the Internal Revenue Service.
The change will cost the IRS an estimated $170 billion over the next decade, The Times reported, characterizing it as "a potential bonanza for America's richest real estate investors."
—Citizens for Ethics (@CREWcrew) March 27, 2020
As the financial website Motley Fool explains, "Depreciation can dramatically reduce taxable income on rental profits." Under current tax law, a married couple can already apply up to $500,000 in depreciation — the gradual, IRS-determined cost of maintaining a property — to their tax bill. The stimulus package lifts that cap for a three-year period.
"It's a pretty big deal," Peter Buell, of the accounting firm Marcum, told The Times. And it benefits the top 1% of taxpayers, making an existing aspect of tax law into a windfall, for some.
As The Times notes, Jared Kushner, President Donald Trump's son-in-law, was able to avoid paying any taxes in 2018 by applying on-paper, if not actually realized, losses from ample property investments.
https://www.businessinsider.com/wealthy-real-estate-investors-get-tax-cut-in-coronavirus-stimulus-2020-3
Charles Davis
Mar 27, 2020, 3:32 AM
The measure is "a potential bonanza" for wealthy investors, The New York Times reported, saving them $170 billion over 10 years.
It temporarily lifts the cap on the tax deduction for real estate depreciation, a boon to the top 1% of taxpayers.
"It's a pretty big deal," Peter Buell, of the accounting firm Marcum, told The Times.
A provision slipped into the $2 trillion coronavirus stimulus package by Senate Republicans enables wealthy real estate investors to reduce their tax burden, The New York Times reported Thursday.
Designed to benefit households with over $500,000 in nonbusiness income, the measure allows investors to apply on-paper losses from falling property values to their bill with the Internal Revenue Service.
The change will cost the IRS an estimated $170 billion over the next decade, The Times reported, characterizing it as "a potential bonanza for America's richest real estate investors."
—Citizens for Ethics (@CREWcrew) March 27, 2020
As the financial website Motley Fool explains, "Depreciation can dramatically reduce taxable income on rental profits." Under current tax law, a married couple can already apply up to $500,000 in depreciation — the gradual, IRS-determined cost of maintaining a property — to their tax bill. The stimulus package lifts that cap for a three-year period.
"It's a pretty big deal," Peter Buell, of the accounting firm Marcum, told The Times. And it benefits the top 1% of taxpayers, making an existing aspect of tax law into a windfall, for some.
As The Times notes, Jared Kushner, President Donald Trump's son-in-law, was able to avoid paying any taxes in 2018 by applying on-paper, if not actually realized, losses from ample property investments.
https://www.businessinsider.com/wealthy-real-estate-investors-get-tax-cut-in-coronavirus-stimulus-2020-3
