March 15, 2002—Owners of commercial real estate should be pleased with the economic stimulus package that was recently signed into law by President Bush, says BOMA International. The $42 billion package includes an extension from two years to five years the carryback period for net operating losses generated in taxable years ending in 2001 and 2002, which will allow property owners to reduce their tax burden in the short term.
BOMA also supported the establishment of a 30-percent depreciation “bonus” for qualified capital investments, which would affect properties placed in service between September 10, 2001 and September 11, 2004.
“While we were disappointed that the economic stimulus bill did not include a permanent change in leasehold depreciation rules—something we as an association have been seeking for years—we were gratified by the fact that leasehold improvements were named as eligible assets to be included in the temporary, 30 percent depreciation bonus provision, which should significantly boost leasing activity and the economy as a whole,” said BOMA International President Sherwood Johnston, III.
The legislation also includes $5 billion in tax benefits and incentives to reinvest in an area of New York referred to as the “Liberty Zone,” to help replace the many properties that were destroyed by the attacks on the World Trade Center.
