If you own rental property or your business’s building, you need to know what the IRS has in its new set of regulations that define when you have a tax-deductible repair and when you have an improvement that you must capitalize and depreciate. Repair deductions are best, but these are likely a little more difficult to achieve under the new regulations. Also, the new regulations contain a big new break that allows a write-off of the old component’s adjusted basis.

On your rental properties, you need proof of your cost allocation to land and depreciable buildings. If you have no proof of that allocation, the IRS has started using the Web to grab the tax assessor’s allocation and use that against your depreciation deductions.

Your lodging property may qualify for one or more of four exceptions that allow Section 179 expensing. The four exceptions override the basic rule that you may not claim Section 179 expensing on property used primarily for lodging or in connection with the furnishing of lodging

Doing business in two different locations requires tax knowledge. The purchase of a town house in the second location brings up many tax planning opportunities and a few hazards to avoid.

One of your first tax steps in buying a rental property is to go through each line item in the closing statement and assign it to one of the following three categories: (1) basis, (2) loan acquisition, or (3) operations. With basis, you allocate to land, land improvements, buildings, and equipment. Loan acquisition falls into either costs of getting the loan or costs to reduce the interest rate. The assignments have a direct impact on how quickly you realize the deductions.

Good tax planning tells you to accelerate your deductions and defer your income. Cost segregation can add tremendous acceleration to the depreciation deductions you claim on a building. That puts money in your pocket.

Cost segregation can save you a lot of money. You can separate the building and the equipment inside to increase your deductions. We include a list of items that count as equipment.

New rules increase the tenant’s ability to first use shorter depreciation periods during the life of the lease and then write off the undepreciated balance of leasehold improvements at the end of the lease. The proper application and intertwining of the new rules enable both landlords and tenants to put cash in their pockets.