GO Zone, tax season, and how can I benefit?

By
Real Estate Agent with NationalREORelief.com

With tax season here, could you be thinking "I could have done better?" Look at the "GO Zone".

The two year anniversary of Hurricane Katrina went by, many media outlets are featuring articles and reports (MSNBC, Rising from the Ruin) reminding us how devasting that storm was by documenting the hardships of the rebuilding process in the Gulf region, a process that for some is taking far too long. Most people read or watch these reports and articles then look at the pictures and think to yourself, "could this truly be our country?". The answer is yes, this is our country. More importantly, what can we do about it?


Very few people know that following the devastation left in the wake of katrina there are investment incentives made available by the federal government that allow you to invest in the redevelopment of the Gulf area while slashing your tax bill in the process. It's called the "GO Zone Act", and many are calling it an investor's dream. "GO" as in "Gulf Opportunity", the "GO Zone Act" allows qualified individuals bonus depreciation of 50% in year one of owning their investment property. Plus, you can carry back any "net operating loss" for 5 years or forward 20.

How does the GO Zone work? Let's say you purchase a GO Zone qualified rental duplex priced at $269,900. You cannot depreciate the land, so if we estimate land value at 10%, you now have a basis of $242,910. Fifty percent depreciation would equate to $121,455. Then multiply that by your tax bracket (assuming 38%) that equals $46,152 that you may deduct from your taxable income. Combine this with the fact that you have no payments for 1 year, collect maximum rent and collect appreciation from the 6th fastest growing market, Biloxi/Gulfport, and you have a great opportunity.

So, did you pay taxes last year? If so (and you probably did), how'd you like to get that money back and turn it into valuable cash-flowing property instead? The "GO Zone Act" incentives allows you to do just that. However, not everyone qualifies for the GO Zone inventives - and not every property qualifies as well. It is imperative that you speak with your tax lawyer or accountant to determine if you qualify for the program.

If you're currently investing in real estate (would you be here if you weren't?), I would strongly urge you to consider adding some "GO Zone" properties to your portfolio. The http://www.themoneytrein.com website features a variety of projects that may be of interest, many of which make excellent investments even without the "GO Zone" benefits. In addition you'll find links to a variety of "GO Zone" related information, and projects from all around the southeast United States.

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