January 10, 2018
The passage of the Tax Cuts and Jobs Act of 2017 seems to be a win for multifamily owners, thanks to provisions benefitting pass-through entities, tax bracket reductions, and depreciation extensions. However, the National Multifamily Housing Council and National Apartment Association (NMHC and NAA) are calling for clarity on some of these provisions.
“Although NMHC/NAA believe Congress intended that the (depreciation) provision would apply to both existing and new buildings, the language is ambiguous,” observed Matthew Berger of the NMHC, in a recent article. The confusion is that the provision could mean that the remaining life of existing buildings be depreciated over a 40-year period if owners decide to deduct business interest.
“NMHC and NAA are asking Congress to affirm that the 30-year depreciation period . . . (applies) to existing buildings,” Berger wrote.
Also confusing is under what circumstances pass-through entities can qualify for and receive the 20% deduction on qualifying income. That portion also requires clarification, Berger noted.
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