Why Investors of Commercial Real Estate in Oregon Need to Stay up On Tax Codes
Our commercial real estate loan consultants at Trim Financial will keep Oregon investors abreast of the long-term strategy necessary for positive cash flow consistency for their commercial real estate properties, from Portland to Bend.
Our loan consultants specializing in Oregon Commercial Real Estate will run the numbers for our commercial real estate clients located in Eugene, Salem, or Medford so that they will structure their Oregon investment property leases more aggressively or plan a refinance strategy that will leverage more cash for future investment opportunities in the State of Oregon…paid for, of course, with deductible interest!
Keep in mind, we at Trim Financial will not offer tax advice, and highly recommend that commercial real estate investors in Oregon consult with their tax professionals familiar with Oregon Property tax codes when researching or preparing tax strategies for their Oregon commercial investment real estate property.
Oregon Tax Codes
We recommend that commercial real estate investment clients located in Oregon become knowledgeable of tax codes that spell out the specifics of the commercial building’s useful life, whether a multi-family, warehouse, or self-storage, and how many years can be depreciated. For example, the current rules state that an Oregon investor must amortize closing costs associated with the acquisition of an Oregon investment property over the same useful life that the property investor located in the State of Oregon, will use for depreciation purposes.
Keep in mind, that I.R.S. commercial property tax code’s depreciation recovery period usually bears no correlation to the actual useful life of a commercial real estate asset located in Oregon.
Capital Improvements for Oregon Real Estate
It is important for the commercial investor in Oregon to stay abreast of I.R.S. tax rules regarding depreciation, which may change at any time that Congress is compelled, whether to offer Oregon Commercial Landlords more or less benefit. Oregon commercial real estate investors and landlords that implement Capital improvements (additions that increase the useful life of the investment property for more than one year) are treated the same as the Oregon principal commercial real estate property when it comes to deductions and depreciation.
An Oregon commercial investor will have the opportunity to typically depreciate the capital addition over the same useful life as the principal investment property located in Portland or Bend, beginning from the completion of the capital improvement (i.e., new roof, additional permitted square footage, etc.)
It appears that the tax code changes recently passed by Congress will lower the depreciation periods for many Oregon investment properties, which in theory will increase the Oregon investor’s tax deductions. Check with your C.P.A. in Oregon to review the actual new rules concerning Oregon Commercial Real Estate as the new property tax code becomes available.