On May 5, FEA sent a letter to the Tax Foundation regarding the immediate expensing real property structures.
The Tax Cuts Jobs Act in 2017 (TCJA), as enacted, allowed for the immediate expensing of personal property only, subject to a phase out period, but exempted residential and commercial real property. The major real estate business associations and the FEA continue to oppose immediate expensing of real property.
It is our view and the view of many in the commercial real estate industry that immediate expensing is not appropriate for long-life assets like real estate but is appropriate for short-life assets like equipment which can and has provided an economic boost without distorting the economy. Like-kind exchanges under existing IRC Section 1031 provide the same economic incentive to reinvest in investment or business-use real property with the same ability to shelter the gain and defer an immediate tax impact, but without the danger of market distortion.
Click here to view the May 5 letter to the Tax Foundation.