- The measure is “a potential bonanza” for wealthy investors, The New York Times reported, saving them $US170 billion over 10 years.
- It temporarily lifts the cap on the tax deduction for real estate depreciation, a boon to the top 1% of taxpayers.
- “It’s a pretty big deal,” Peter Buell, of the accounting firm Marcum, told The Times.
- Visit Business Insider’s homepage for more stories.
A provision slipped into the $US2 trillion coronavirus stimulus package by Senate Republicans enables wealthy real estate investors to reduce their tax burden, The New York Times reported Thursday.
Designed to benefit households with over $US500,000 in nonbusiness income, the measure allows investors to apply on-paper losses from falling property values to their bill with the Internal Revenue Service.
The change will cost the IRS an estimated $US170 billion over the next decade, The Times reported, characterising it as “a potential bonanza for America’s richest real estate investors.”
As if Jared Kushner's involvement in coronavirus response wasn't already preposterous enough (between the nepotism and his brother's company) now we learn that there's a huge tax giveaway for people like him and his family in the stimulus package.https://t.co/dj726ZVbs5
— Citizens for Ethics (@CREWcrew) March 27, 2020
As the financial website Motley Fool explains, “Depreciation can dramatically reduce taxable income on rental profits.” Under current tax law, a married couple can already apply up to $US500,000 in depreciation – the gradual, IRS-determined cost of maintaining a property – to their tax bill. The stimulus package lifts that cap for a three-year period.
“It’s a pretty big deal,” Peter Buell, of the accounting firm Marcum, told The Times. And it benefits the top 1% of taxpayers, making an existing aspect of tax law into a windfall, for some.
As The Times notes, Jared Kushner, President Donald Trump’s son-in-law, was able to avoid paying any taxes in 2018 by applying on-paper, if not actually realised, losses from ample property investments.
- Read more:
- FULL INTERVIEW: Los Angeles Mayor Eric Garcetti says the worst is yet to come, and warns other mayors to shut their cities down now before it’s too late
- Immigration judges, ICE attorneys, and experts are calling on the Trump administration to close the courts to stop the novel coronavirus from spreading
- California’s governor said hospitals are so strapped for face masks they are turning to Los Angeles seamstresses – an industry notorious for poor labour conditions
Business Insider Emails & Alerts
Site highlights each day to your inbox.