The MS Coast won another victory when the Go Zone bill was extended last month, providing for accelerated depreciation on real estate property put into use during 2011. The prior extension [2010] was a bit “thrown together” and extended the “put into use” part, but did not extend the expenditure date. What this means is that if you bought real estate in the Go Zone for the tax credits, you had to purchase something that was built on or prior to December 31, 2009 – this has changed.

The new extension will allow for any new property that has not been put into use. So, any property built since the Go Zone was enacted and not put into use will qualify.

What does this mean to you? Anyone looking for Go Zone property during 2010 had to find property that was built before the end of 2009 and never occupied (put into use). As you can imagine, the later in the year it got – the harder it was to find good, viable property as all the good ones were already sold. This left mostly bad investments or really high-dollar investments that only a handful of people could qualify for.

After a few hours tracking down information on the extension, I was able to get in contact with two attorneys that are well-versed in Go Zone. One of which I have referred before, and the other was very prompt in response to my inquiries and based on some papers he has authored/co-authored, seems extremely knowledgeable.

John Harral with ButlerSnow stated to me in a phone conversation that ultimately, any property built after Katrina and put into use during 2011 would qualify, although he also said that any specific questions should be directed to him or another Go Zone familiar attorney and your tax adviser.

Michael Haun with Paul, Hastings, Janofsky & Walker LLP, stated:

The recent extension pushed back both the placed-in-service date and the construction date to January 1, 2011.  Consequently, with respect to nonresidential real property or residential rental property that is placed-in-service by December 31, 2011, the adjusted basis of such property attributable to construction before January 1, 2012 is now eligible for the additional first-year depreciation.

What does that mean? In as simple terms as possible – anything that has been built and not put into use will qualify. There are an abundance of opportunities in existing properties as well as building new ones that would qualify for this. Use this CONTACT ME link to email or call me to help you find viable investments for your needs.

Attorney John Harral can be reached at (228) 575-3038
Attorney Michael Haun can be reached at (404) 815-2279
I (Damion Flynn, Broker) can be reached directly at (228) 365-1883

The refundable tax credit enacted for the 2009 tax season will allow first time home buyers, or buyers who are considered first time home buyers (have not owned a home in 3 years) to claim a credit up to $8,000 on their taxes. If you are getting money back on your taxes, you will get even more. If you would normally pay, this will offset your tax liability.

The tax credit was enacted to help get rid of existing inventory in the housing market and is a change to the existing $7500 tax credit. The previous tax credit was in the form of a forgivable loan – the new $8,000 credit does not have to be paid back.

In order to qualify for the credit, you simply have to buy a “first” home in 2008, make less than $75,000 (or $150,000 married filing jointly), and talk to your tax preparer. If you have special circumstance which apply to you or are subject to withholding, you may want to talk with your accountant on how this tax credit can benefit you.

In order to fully qualify and avoid recapturing the tax credit, you must move into the property (and own it) prior to December 1, 2009 and must maintain it as your primary residence for at least 3 years. Special circumstances are allowed for the 3 year occupancy but it is best to plan for 3 years of occupancy.

Table Below provided from information by the National Association of Realtors®