An Online Guide For GO Zone Extended in 2011
The Gulf Alternative Zone Act, generally known as the “GO Zone” has been extended by president Obama by way of 2011. That is welcomed information for residents of the Gulf Coast, as well as buyers in search of to learn from the 50% bonus depreciation related to the acquisition of recent GO Zone qualified actual estate.
The GO Zone was officially enacted in 2005 by President Bush after hurricanes Wilma, Rita and Katrina ravished the Gulf Coast in 2005. The GO Zone was originally deliberate to finish in 2009, but was prolonged into 2010 and has as soon as again been extended by means of December 31, 2011. The GO Zone extension for 2011 is much totally different nevertheless from the extension of 2010.
The GO Zone extension in 2010 allowed investors to only qualify the improvements of a property that had been recorded by December 31, 2009. This meant, that if a property was only 50% full by the December 31, 2009 date, only that portion was eligible for the 50% bonus depreciation.
Lets have a look at a 2010 example:
If a property had a purchase order value of $200,000 with a land worth of $40,000. Lets assume 50% of the property was full as of December 31, 2009. To calculate the amount of bonus depreciation an investor would be eligible for, simply subtract the land value from the purchase worth ($200,000 – $forty,000) to get $160,000. Since only 50% of the property was complete by the top of 2009, solely 50% or ($a hundred and sixty,000/2) $80,000 might be used to calculate the 50% bonus depreciation. 50% bonus depreciation of $80,000 improvement would give the investor $forty,000 in GO Zone bonus depreciation.
The GO Zone extension in 2011 permits real estate investors to not only buy finished property, but additionally any new building property that is finished by December 31, 2011! This transformation within the GO Zone rules is big for real property buyers searching for the 50% bonus depreciation.
To learn the new GO Zone extension rules intimately, visit the “Tax Relief, Unemployment Insurance coverage Re-authorization, and Job Creation Act”, specifically section 765.
Roseann A. Lawver
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