Expense or Capitalize Cost in Real Estate Development
1 hour 30 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.
• You will be able to identify accounting and tax rules which create differences in real estate expenses.
• You will be able to understand U.S. tax compliance issues regarding tangible property and TCJA rules.
• You will be able to maximize tax benefits from capitalizing real estate costs and claiming depreciation.
• You will be able to You will be aware of year-end tax strategies and examples of small business exceptions and elections.