The 1031 Exchange Bros David & Tom Moore
Gotta Minute – Learn A Lot!
Is it better to capitalize or expense for taxes? This is a question we get almost every day with our 1031 Exchange clients.
Read the Full Transcript
David Moore: How often do you talk to somebody about buying a property, particularly regarding whether they put money into it during the time they’ve owned it and whether it’s been expensed or capitalized?
Tom Moore: Well, almost every time we talk to them, because people say, “I bought this property for X, and I put Y into the property.”
Basically the next question that comes out is were they capitalized improvements or just expensed items. Were there major remodels, like a new kitchen, new surfaces, or new siding, or was it mostly repairs?
That is going to affect their basis because they might think that putting 100 grand into a property instantly bumps their basis by that much.
The bottom line is maybe none of it was all expensed. Certainly, it was a benefit
to them in that tax year but it’s not going to affect their basis and therefore gain on the sale when that occurs.
To stay up to date with our video content subscribe to our YouTube channel.
Whether looking for information on simple to complex 1031 issues, Cost Segregation, Life Insurance Contract Sales, DSTs or even Qualified Opportunity Zones you will find information on our channel.
David and Thomas Moore, the co-founders of Equity Advantage & IRA Advantage
Whether working through a 1031 Exchange with Equity Advantage, acquiring real estate with an IRA through IRA Advantage or listing investment property through our Post 1031 property listing site, we are here to help Investors get where they want to be. Call them today! 503-635-1031.
"WASHINGTON STATE LAW, RCW 19.310.040, REQUIRES AN EXCHANGE FACILITATOR TO EITHER MAINTAIN A FIDELITY BOND IN AN AMOUNT OF NOT LESS THAN ONE MILLION DOLLARS THAT PROTECTS CLIENTS AGAINST LOSSES CAUSED BY CRIMINAL ACTS OF THE EXCHANGE FACILITATOR, OR HOLD ALL CLIENT FUNDS IN A QUALIFIED ESCROW ACCOUNT OR QUALIFIED TRUST." RCW 19.310.040(1)(b) (as amended)