I'm already reaping significant tax benefits, realizing savings both last year and this year
Torrance, CA (PRWEB) September 25, 2008
Florida-based EquityBuild is a real estate investment company that is offering investors a plan to take advantage a special government tax shelter program that runs out at the end of 2008.
With the passage of the Katrina Emergency Tax Relief Aid of 2005 and the Gulf Opportunity (GO) Zone Act of 2005, Uncle Sam extended a golden opportunity to shelter up to $25,000 of taxable income through a generous 50% first-year depreciation deduction for residential rental property located in areas impacted by the 2005 hurricane season.
This is in addition to the normal straight-line depreciation deduction. To top it off, the allowance is deductible even against the alternative minimum tax. It doesn't get any better than that.
But it can get worse. Congress gave this jewel-of-a-tax break a short shelf-life, setting a sunset date of December 31, 2008. "A turnkey program makes participation in the benefits of income property ownership very easy for a person like me who does not have a tremendous amount of expertise in the field," says Ramon Blanco, a network systems analyst living in Naples, Florida. "By taking advantage of that 50% depreciation bonus, I figure we can probably save ourselves about $15,000 in income taxes this year."
"I'm already reaping significant tax benefits, realizing savings both last year and this year," says David Wilson, who resides in Charlotte, North Carolina and works in the information technology industry. "This tax savings is a very key element of the business model for the equity-building program I'm involved with."
Turnkey specialists facilitate the tax savings
The program Wilson refers to is southwest Florida-based EquityBuild, Inc. Founded and managed by real estate investor Jerry Cohen. Having handled more than 1000 transactions within his 25 years in real estate, Cohen perfected a proprietary econometric model that identifies undervalued and outperforming markets. His EquityBuild program is one of the first and largest of its kind to link individual investors with qualifying homes in the GO Zone. As few investors have the time to hop a plane to the Gulf coast, negotiate a house purchase, renovate it and lease it before December 31, a program such as this succeeds by quickly handling all aspects of the process, from soup to nuts.
"The fact that they take care of the details is really wonderful, making it very easy to invest," says Sue Horowitz of Naples, Florida. "As a real estate agent, I've done property management before, and have been involved with other investments that were horrendous. But with a program like EquityBuild I never have to worry about anything. They handle it for me."
Of course, the foundation for succeeding with any real estate investment involves identifying the ideal community in which to invest. Any of 91 counties within the three state area will qualify for the 50% depreciation allowance, but hooking up with one that represents a good long-term investment vehicle with potential appreciation and a good income stream demands a higher level of due diligence.
In the case of EquityBuild, Cohen targeted Jackson, Mississippi as the bull's-eye for investment success--for good reason. In 2006, Partners for Livable Communities identified Jackson as one of America's "Top 30" communities in which to live. Considering economics only, the 2000 census pegged the median single-family home price in Jackson at $64,400, making it the ninth most undervalued metro region in the U.S. According to a March 2007 housing valuation report by National City Corporation, Jackson ranked in the top three percent of 317 metro areas for housing affordability.
By collecting the rents and maintaining the properties long after the initial lease is signed, these programs encourage investors to hang in for the long run. Flipping is discouraged in favor of traditional value-based cash-flow real estate investing that possesses the potential for appreciation. The fact that the investor actually holds title to each property--as opposed to a securitized interest in a pool of homes--also serves to foster a sense of ownership for the duration.
If Jackson's appeal as a sure-fire income property location offers reason enough to invest there; the generous depreciation allowance acts as icing on the cake. To ensure that the maximum tax benefits accrue to the investor, these turnkey programs provide all the accounting information necessary to cash in on this once-in-a-lifetime tax windfall. Those who require even more assurance that every move complies with IRS regulations are usually referred to qualified CPAs who specialize in the GO Zone depreciation allowance.
"I own seven houses right now, most in Jackson, Mississippi, continues Wilson. "These tax benefits are pretty aggressive, so it's kind of refreshing to have someone guide you. The house selection, the property management, the tax advice; all those elements are steered by EquityBuild. You only have to get a little involved in financing and signing documents, but otherwise it's pretty hands-off."
A Real Estate Investor wishing to take the IRS up on its offer needs to act fast.
For more information, contact EquityBuild, Inc. at (800) 261-0648 or visit http://www.equitybuild.com
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