Donald Trump’s potential $0 Tax Bill might just be the reason why we do Commercial Real Estate Development. According to the New York Times, perhaps the reason that Donald Trump hasn’t released his tax returns is because he’s not actually been paying any Federal taxation. The key point, is if the New York Times prediction is indeed true, then no one would ever conduct commercial real estate development. However, it is clearly obvious today that people are involved in commercial real estate development. “But this specific tax “break”, depreciation on commercial real estate, is entirely justified by the basic economics of the business itself. If buildings did not depreciate there would be no commercial property redevelopment business. We can see that there is a commercial property redevelopment business – thus commercial buildings do depreciate and a depreciation allowance is the correct thing to have,” Forbes wrote.
“Few tax advisers to major real estate developers would speak for attribution, because their clients benefit from the same tax breaks available to Mr. Trump,” the New York Times wrote. “Real estate is notorious for throwing off huge deductions,” stated Mr. Rosenthal of the Urban-Brookings tax Policy center.”That coupled with wide latitude in the timing and recognition of income make real estate development extremely attractive from a tax standpoint.”
Mr. Trump’s economic plan has three tax brackets which include limiting taxes on all forms of business income to 15 percent. This would end estate tax and would also “exclude child care expenses from taxation. Trump said the following at his economic speech in Detroit,” I am proposing an across-the-board income tax reduction, especially for middle-income Americans. This will lead to millions of new and really good-paying jobs. The rich will pay their fair share, but no one will pay so much that it destroys jobs, or undermines our ability as a nation to compete. As part of this reform, we will eliminate the Carried Interest Deduction, a well-known deduction, and other special interest loopholes that have been so good for Wall Street investors, and people like me, but unfair to American workers. Tax simplification will be a major feature of the plan. Our current tax code is so burdensome and complex that we waste 9 billion hours a year in tax code compliance. My plan will reduce the current number of brackets from 7 to 3, and dramatically streamline the process. For many American workers, their tax rate will be zero. While we will develop our own set of assumptions and policies, agreeing in some areas but not in all or in others, we will be focused on the same shared goals and guided by the same shared principles: jobs, growth and opportunity. These reforms will offer the biggest tax revolution since the Reagan Tax Reform, which unleashed years of continued economic growth and job creation. We will Make America Grow Again.”