CRE Fares Well in House of Representatives’ Tax Plan
WASHINGTON, DC–Thursday morning the US House of Representatives unveiled its long-anticipated $1.51-trillion tax reform measure, a sweeping piece of legislation called the “Tax Cuts and Jobs Act.”
To cut to the chase for our readers: the bill has largely good news for the commercial real estate industry. The capital gains incentive is retained as are the current like kind exchange 1031 rules. The bill also recognizes that the cost of real estate debt is a necessary business expense and interest on debt used in a real estate trade or business would continue to be deductible.
Mortgage Interest Deduction Cap, Pass-through Entities
The industry didn’t get everything it had wanted. The bill does cap the mortgage interest deduction to $500,000 instead of offering a tax credit — a measure that the National Association of Home Builders had lobbied for, and lost.