Go Zone Real Estate: Let Uncle Sam Pay Your Bill
March 28, 2009, Writen by: Chris Anderson, Ph.D
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Since I have been immersed in the Katrina Go Zone for the last two years, it amazes me that many real estate investors and tax professionals have no idea what the Go Zone is or how it can help them reduce taxes to zero for this year, and potentially 5 years to come.
But I realize that even though I have been living & breathing this for the last several years, in reality this is an obscure piece of tax code that most people, and most tax professionals know nothing about…. That is unfortunate.
For purposes of this blog post, let me give you a short primer of the Go Zone legislation and then point you to a great resource if you want to learn more:
- Tax code enacted in 2005 to help Hurricane Katrina impacted areas;
- Allows investors to deduct up to 50% of the purchase of SOME real estate the first year on their taxes;
- This is called “Bonus Depreciation” and can result in tax savings of 10s, 100s, or even millions of dollars;
- Not a new concept….. The Government used this same trick after 9-11: called the Liberty Zone;
- This best applies to three classes of people:
- Real Estate Professionals;
- People with adjusted gross incomes less than $150,000
- High income W-2 earners but with spouses not working.
- Typically property must be new and put into rental service;
- Currently limited to a few counties in Mississippi and a few parishes in Louisiana;
- You need to own your structure before the END OF 2009 based on current legislation
If you want to learn more about this, go to this resource:
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