REE-4204 Lecture Notes - Lecture 16: Alternative Minimum Tax, Tax Rate, Tax Shelter
11 Nov 2018
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Document Summary
Valuation of real estate: factors affecting valuation, financial leverage, tax shelters such as depreciation, tax treatment of the asset. Tax regulations and their effect on the value of real estate investment: definition of income for tax purposes differs from btcfs, non-cash expenses are allowed. Tax law changes affecting real estate: changes in marginal tax rates, changes in depreciation allowance, length of recovery period, accelerated versus straight-line depreciation, tax treatment of capital gains, ability to write off losses. Classifications of real property: property held for principal residence, property held for investment, property held for resale to others, property held for use in trade or business. Property held for investment: held strictly for income or investment and owner has no participation in operations, generally unimproved land and net leases, limitations on interest deductibility, limitations of capital loss write offs. Property held for resale to others: viewed as inventory.
