Wealth building on board the Moneytrein.com  

You can fing groups posting, blogging, webinars, seminars, e-campaigns, tours, rallies, media blitzes, faxes, carrier pigeons, smoke signals, drums, intelligence briefings, and virtually any other king of media summit all talking about the "GO Zone". But does it make sense to the average person? 

The IRS has all kinds of incentives and tax breaks such as bigger education credits, extended tax deadliines, bigger charitable giving deductions, and much more. But... the one that you as a real estate investor should pay attention to is the whopping bonus 50% depreciation allowance for investors purchasing property (not just real estate) after August 27, 2005.  As long as the property is either "nonresidential real property" or "residential rental property" (which pretty much means just about everything you would want to invest in) you can partake in this rare IRS "gift".

What does this mean to you and your bottom line?  It means a huge tax deduction in the first year and possibly a huge tax return. 

What are the requirements you need to meet?

• Place the property in service after August 27, 2005 but before 2009 (for real property) Note: The GO Zone depreciation has been extended until Dec 31, 2010 for Hancock, Harrison, Jackson and Pearl River Counties in Mississippi 
• Can be:  tangible property depreciated under MACRS system, water utility property, computer software readily available to general public, qualified leasehold improvement property, and.... NONRESIDENTIAL REAL PROPERTY AND RESIDENTIAL RENTAL PROPERTY.

Some people have been saying that it is just a 50% depreciation in the first year... but it is an additional 50% depreciation in year 1.  You can depreciation your standard rate plus the 50%!

Just don't get too carried away.  Just like with any IRS "gift" there is a slight catch.  If you choose to take the 50% depreciation and the IRS removes the "Go zone" designation for the area you now own in, you may have to "recapture as ordinary income any excess benefit you received from claiming the special allowance". 

Either way, this bonus depreciation could mean big ROI from the outset. 

So what kind of property works best in the "GO Zone"? See our outstanding cashflow properties at gozonehomes.com.