Real estate can be depreciated and some may be eligible for accelerated depreciation, but neither is a cash-out option. Accelerated depreciation allows large amounts of depreciation to be taken out earlier on in a real estate project, but a large tax loss can be found. When the accelerated depreciation is over, a cash-flow problem may result and may not be enough to cover the monthly debt service for the project's mortgage.
Watch this video to learn more from 415 Group Senior Manager Chris Schatz, CPA, as she discusses real estate transactions that are highly leveraged.
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