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Oy! Kushner pays no taxes....

Who knew depreciation expense is now racist and misogynistic?

And evil. E-V-I-L!!!!
 
"The law assumes that buildings’ values decline every year when, in reality, they often gain value. Its enormous flexibility allows real estate investors to determine their own tax bills."

I'm all for addressing this in tax reform.
 
"The law assumes that buildings’ values decline every year when, in reality, they often gain value. Its enormous flexibility allows real estate investors to determine their own tax bills."

I'm all for addressing this in tax reform.

Not sure the exact mechanism at play and how much they can claim depreciation, however, they will eventually have to pay the taxes when they sell.
If you build million dollar building, make 100K/year in rent and depreciate 100k/year in rent and pay no taxes because you technically made no money, then at the end of 10 years when you sell that building you have to pay income tax on the sell price since you already took depreciation
 
Not sure the exact mechanism at play and how much they can claim depreciation, however, they will eventually have to pay the taxes when they sell.
If you build million dollar building, make 100K/year in rent and depreciate 100k/year in rent and pay no taxes because you technically made no money, then at the end of 10 years when you sell that building you have to pay income tax on the sell price since you already took depreciation

And if the building is not sold and instead passed on via inheritance?
 
"then at the end of 10 years when you sell that building"

They don't have to sell the building after 10 years.
 
If only there were some other way to profit off of ownership besides sales.
 
Not to mention they could just 1031 the proceeds into a new building, releverage, and cash out.

No one is saying any of this stuff is illegal or immoral. Just that there are avenues to build significant wealth using tax laws and OPM to your advantage. And being born with the right last name certainly helps you get in the game.
 
If only there were some other way to profit off of ownership besides sales.

Right. And if you profit enough, you'll never have a financial need to sell.
 
It takes money to make money

Isn’t that a problem? That’s why it’s harder and harder for people without money to make money. Why would we want an economy in which the people who make money are the ones who already had it? Let’s do better.
 
And if the building is not sold and instead passed on via inheritance?

If its sold then you're paying taxes, if it's not sold you can't depreciate it any further and youre paying taxes.
The article is a bit misleading by saying a building appreciates, thats largely false. They depreciate just like anything else, what generally appreciates is land. A new house is worth much more than the 30 year old house next door.
 
How long can you depreciate it?
 
up to 39 years. The tax code encourages people to buy real estate.
 
If its sold then you're paying taxes, if it's not sold you can't depreciate it any further and youre paying taxes.
The article is a bit misleading by saying a building appreciates, thats largely false. They depreciate just like anything else, what generally appreciates is land. A new house is worth much more than the 30 year old house next door.

This seems like it might be true in most markets, but I can’t imagine it being true in New York. Is it?
 
This seems like it might be true in most markets, but I can’t imagine it being true in New York. Is it?

Not being a real estate developer I can't say for certain, but i'd imagine so. Some lot with an old POS building on it is probably worth less than an empty lot as the building, if it hasn't been maintained, is probably more expensive to renovate (or demolish) than to start from scratch
 
Yes, property that isn't maintained depreciates, but most houses, including old ones, appreciate in value.
 
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