Services 1031 Exchange Additional Basis

Additional Basis

In addition to rental income streams and property appreciation, the tax benefit of depreciation deductions can make an impact for most real estate owners. We encounter many situations where substantial value has been created; and rather than selling or disposing of an asset, an investor wishes to refinance and continue to own the property over a longer holding period. A problem can be that the depreciation schedule has substantially run out whether 27 year schedule for residential or 39 year schedule for commercial assets. We find that these credit tenant net lease assets can be acquired in a highly-leveraged manner due to the tenant's creditworthiness, often with debt pre-arranged on a non-recourse basis, which can be acquired as additional basis for an owned asset to create a better tax profile. Again, as always, your accounting professional can provide guidance if this strategy has application in your particular situation. We have direct access to such access and can serve as an ancillary service to your accountant as he or she provides tax consulting services.

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