Wednesday, December 20, 2017

Congress Passes Tax Overhaul - What it Means to the Multifamily Industry

The U.S. Congress passed the Tax Cuts and Jobs Act today, which will impact real estate owners throughout the country. The National Multifamily Housing Council has summarized key components of the bill, including:
  • Individual and pass-through income will be taxed in seven brackets, with rates ranging from 10-37%
  • A portion of pass-through business income will qualify for a 20% deduction
  • REIT dividends are fully eligible for a 20% deduction
  • The current-law 27.5-year depreciation period for multifamily buildings is now extended to 30 years
  • Businesses may expense $1 million in qualifying property in the year of purchase
  • Like-kind exchanges for real properties are preserved
  • Assets must be held three years to receive capital gains tax treatment
  • Low Income Housing Tax Credits and private activity bonds will be preserved, but will likely be affected by the cut in corporate tax rates
  • The estate tax exclusion is doubled from $5.49 million for a single filer and $10.98 million for a married couple
Click here to download a 6-page summary by the National Apartment Association and the National Multifamily Housing Council. 

Read more on the NMHC website, or find details on specific provisions in their tax reform chart.

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