Federal Disaster Recovery Zones

 
Why is there a Go-Zone? What is its purpose?

The Gulf Opportunity Zone Act of 2005, Hurricane Katrina has had a devastating impact on millions of people. In response to this, the U.S. Government swiftly passed legislation to encourage redevelopment in the regions referred to as the Go-Zone. This legislation, if used properly, will have an enormous effect for both the Go-Zone regions and for the investors who help rebuild it.  2005, Signed into law by President Bush on December 21, 2005 it was fashioned after the New York Liberty Zone incentives that were formed for parts of lower Manhattan after the 9-11 terror strike.  The Act is intended to stimulate rapid, private investment within the Gulf Opportunity Zone (Go-Zone).   

What is this 50% Bonus Depreciation and will I qualify?

The 50% Bonus Depreciation is one of the best tax shelters in our lifetime for the average investor.  In order to attract the real estate invesment community, the government created the Go-Zone legislation, which rewards real estate investors who put rental property into service.  In return for helping to create affordable housing, investors are allowed to depreciate 50% of the improvement in the first year!  

How much is this?

Go-Zone  The 50% Bonus Depreciation is one of the best tax shelters in our lifetime for the average investor

Example: 

Purchase Price Structure & Land:                    $ 142,900   
Less land value                                                $   (7,000) 
Structures Value                                              $ 135,900    

 
Std. depreciation: 

        $ 135,900@ 3.78% - 27.5 years                      $   5,137

Go-Zone depreciation   

        $ 135,900 @ 50% - 1^st year                              $ 67,950

Total first year depreciation                                 $ 73,087

 

*With a 30% tax bracket, the total first year depreciation would potentially save in rebate/ taxes of about $21,135.00

Most CPA’s aren’t familiar with the Go Zone depreciation allowance; we can refer you to CPA’s that have great knowledge about program & savings

**Standard depreciation of 3.78% year 2 thru duration of depreciation term. When property is sold the depreciation is recaptured.

This example is for illustration purposes only. Consult your CPA or Accountant to see actual savings

Making a good economic decision on a property before considering the tax benefits is crucial, but a good property can be made a great property by the 50% bonus depreciation.

The Go-Zone 50% bonus depreciation, especially since taxes will probably go up in the following years.  No matter who is elected into the White House, it is difficult to believe that any taxes will be cut when we have an outrageous deficit, expensive war and rough financial markets.  Smart investors position themselves to take advantage of large tax benefits and emerging markets. That is exactly what Hancock County is, and it is expected to continue its steady growth for the next 5 years.

 We give you three easy ways to contact us:

•  Visit us on the Web:  www.gcrevital.com

• Email Pat at: Pat@gcrevital.com
• Call Pat at:  228.224.6456