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Find tax shelter for renovations

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in Small Business Tax,Small Business Tax Deduction Strategies

The new tax law—Tax Cuts and Jobs Act (TCJA)—preserves a major tax credit for building renovations, but with certain modifications.

Strategy: Obtain certification for a “historic structure.” If you meet the requirements, you can claim a 20% credit for the renovations, albeit at a slower pace than you could before the new law.

Conversely, the TCJA completely eliminates another tax credit, the rehabilitation tax credit (“rehab credit”).

Here’s the whole story: Previously, you could claim either a 10% rehab credit or a 20% historic structures credit.

1. Rehab credit: To qualify for the 10% credit, the building must have been placed in service before 1936. Also, the work was required to be substantial in nature (i.e., expenses over a two-year period in excess of the greater of $5,000 or the adjusted basis of the building and its structural components). In addition, specific wall retention requirements had to be...(register to read more)

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