Real estate investors will get $170B windfall from bailout package

Provision in $2T bill lifts restrictions on depreciation

National /
Mar.March 26, 2020 06:45 PM
U.S. Senate Majority Leader Mitch McConnell (Credit: Win McNamee/Getty Images, iStock)

U.S. Senate Majority Leader Mitch McConnell (Credit: Win McNamee/Getty Images, iStock)

Tucked inside the federal government’s massive economic rescue package is a $170 billion windfall for real estate investors.

Washington’s $2 trillion bill is a provision that allows investors to write down the depreciation on properties beyond the previous limit of $500,000 a year, the New York Times reported. According to a draft congressional analysis, it’s the second-largest tax giveaway in the multitrillion-dollar proposal.

“It’s a pretty big deal,” Peter Buell, an accountant who heads up the real estate tax services practice for Marcum, told the Times.

Per the terms of President Trump’s 2017 tax cuts, investors could use depreciation to shield the first $500,000 of a married couple’s capital gains from investments each year.

The current rescue package lifts that restriction for three years, according to the Times. Senate Republicans inserted the language onto page 203 of the 880-page bill. The House of Representatives is expected to pass the bill Friday.

A spokesperson for the Real Estate Roundtable, however, said that some investors avoided the annual cap by spreading their losses out on paper over several years, downplaying the real impact of the new proposal.

Among those who stand to benefit are people close to Trump including his son-in-law and senior adviser Jared Kushner, who reportedly likely didn’t pay federal income taxes for several years due to depreciation of his properties. [NYT] — Rich Bockmann


Related Articles

arrow_forward_ios
Confidence is lowest in the Northeast and Midwest, at 73 and 70. (iStock)
Homebuilder sentiment slides to 10-month low in June
Homebuilder sentiment slides to 10-month low in June
The Savoy Hotel in London, UK in 1980 (Getty)
UK hospitality employers could cut half a million jobs
UK hospitality employers could cut half a million jobs
The commercial market was hit hard by the pandemic, and property tax revenue is expected to fall 5 percent. (iStock)
Tax bills show how much Covid devalued NYC real estate
Tax bills show how much Covid devalued NYC real estate
Employers project 62 percent of workers will come back to Manhattan offices in September (iStock)
Over 60% of Manhattan office workers will return in September: survey
Over 60% of Manhattan office workers will return in September: survey
(iStock)
NY’s rent relief program launches, with glitches
NY’s rent relief program launches, with glitches
The colorful Prizm Outlet in Nevada. (Prizm Outlet via Facebook)
Mall short-sellers see a big payout from Nevada mall auction
Mall short-sellers see a big payout from Nevada mall auction
What is the future of Times Square?
What is the future of Times Square?
What is the future of Times Square?
Sen. Brian Kavanagh (Getty, New York Senate)
Lawmakers propose tweaks to rent relief program, foreclosure protections
Lawmakers propose tweaks to rent relief program, foreclosure protections
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...