Real Estate
Does your business work on projects that take longer than a year to complete? Recognizing revenue from long-term projects usually requires the use of the “percentage-of-completion” method. Here’s an overview of when it’s necessary and how it works. Completed contract vs. percentage-of-completion Homebuilders, developers, creative agencies, engineering firms, and others who perform work on long-term…
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Navigating the Complexities of First-Year Depreciation Deductions for Qualified Improvement Property
Your business may be able to claim big first-year depreciation tax deductions for eligible real estate expenditures rather than depreciate them over several years. But should you? Qualified improvement property is not as simple as it may seem. Qualified improvement property For qualifying assets placed in service in tax years beginning in 2023, the maximum…
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On March 27, 2023, the Financial Accounting Standards Board (FASB) published narrowly drawn amendments to the lease accounting rules. The updated guidance clarifies issues that are relevant to common control leases, which are rental agreements between businesses that have the same owner. Written vs. verbal leases Accounting Standards Update (ASU) No. 2023-01, Leases (Topic 842)…
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If your business occupies substantial space and needs to increase or move from that space in the future, you should keep the rehabilitation tax credit in mind. This is especially true if you favor historic buildings. The credit is equal to 20% of the qualified rehabilitation expenditures (QREs) for a qualified rehabilitated building that’s also…
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Does your business need real estate to conduct operations? Or does it otherwise hold property and put the title in the name of the business? You may want to rethink this approach. Any short-term benefits may be outweighed by the tax, liability, and estate planning advantages of separating real estate assets from the business. Tax…
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A business or individual might be able to dispose of appreciated real property without being taxed on the gain by exchanging it rather than selling it. You can defer tax on your gain through a “like-kind” or Section 1031 exchange. A like-kind exchange is a swap of real property held for investment or for productive…
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