The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in March of 2020, but two of its most relevant provisions for property owners will expire at the end of this year.
Specifically, the law provides for the temporary suspension of excess business loss limitations and a reinstatement of net operating loss carrybacks rules.
These two provisions, coupled together, may present an opportunity to secure permanent tax savings by using losses generated in 2020 to free up taxes paid in 2015-2019.
Along with employing the age-old strategies of accelerating deductions and deferring income, taxpayers should consider sales of nonstrategic troubled assets to maximize their 2020 net operating loss.
In short, property owners who have challenged assets have the unique opportunity to realize tax benefits which may include refunds of prior taxes paid by selling certain property now.
These tax provisions are set to expire December 31, 2020, so if you wish to take advantage you must act now.
We encourage you to consult with your tax professional to see if you or your firm stands to benefit from this strategy.
Contact us as soon as possible so we can help you benefit from these tax savings by disposing of your property before year end.
Tony Eaton President, Land Advisors CA (949) 656-8030 teaton@landadvisors.com
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