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Product ID: 407007EAU
 
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Expense or Capitalize Cost in Real Estate Development

OnDemand Webinar (95 minutes)

Gain an understanding of the accounting and tax rules which create differences in real estate expenses.U.S. accounting and tax rules are not always the same for reporting real estate development costs. In some cases, real estate costs have different methods due to construction and production periods. The timing of costs makes it difficult to categorize costs as capital expenditures or operating expenses. For tax purposes, the TCJA has added additional rules for small businesses that simplify some cost issues. However, recent tangible property regulations continue to add more issues for real estate businesses. This topic will provide you with an overview of the current treatment of real estate issues for businesses, including reconciling the capitalization of costs for book and tax income and expenses. The range of topics will include definitions and terms for accounting purposes, tax elections and methods, planning for the tangible property rules, and updating real estate businesses for the impact of TCJA rules.

Authors

Thomas M. Kosinski, C.P.A., M.S.T., Ostrow Reisin Berk & Abrams, Ltd.

Agenda

Definitions and Rules Under the Tax Cuts and Jobs Act (TCJA)

• Qualifying Small Businesses

• Production Period

• Direct Production Costs

• Real Estate Taxes

• Interest Expense

• Insurance Expense

Tangible Property Regulations and Rules

• Betterments, Restorations and Adaptations

• Change in Accounting Methods

• Repairs and Maintenance

• Grouping Real Estate Assets

• Disposition of Assets

Real Estate Tax Elections and Alternatives

• Capitalization of Taxes and Carrying Charges

• Depreciation Methods and Bonus/179 Expense

• Cost Segregation for Asset Classes and Lives

• De Minimis Safe Harbor Election

• Materials and Supplies

Tax Planning Cases and Examples for Discussion

• New Real Estate Development Issues

• Cost Segregation for Existing Real Estate Assets

• Repairs and Improvements on Older Assets

• Partial Replacements and Restorations

• Partial Disposition of Real Estate