Tips from your Local Real Estate Expert
SANDRA GARCIA, REALTOR® AT CORCORAN INFINITY PROPERTIES IN ALPINE NJ
As the year draws to a close, it’s the prime season to revisit your tax strategy, especially for those in Real Estate. I’m Sandra Garcia, Alpine resident, Realtor® at Corcoran Infinity Properties, Real Estate Investor, and your trusted guide to this dynamic market. Whether you’re a Homeowner, Buyer, or Seasoned Investor, December is the ideal time to optimize your portfolio and approach your investments as a true business.
Let’s dive into three powerful moves you can still make before December 31 to lower your 2025 tax bill and set yourself up for Greater Real Estate Success in 2026.
- Bonus Depreciation & Cost Segregation:
With a cost segregation study, you break your property into deductible parts, like HVAC, fixtures, flooring, roof, and driveway, which allows you to claim accelerated depreciation. With 100% bonus depreciation back, you can deduct the entire qualifying portion this year, rather than spreading deductions over decades. According to tax advisors at Cherry Bekaert, this can dramatically improve cash flow for investors and is one of the most overlooked opportunities for homeowners and investors looking to offset other sources of income.
- Real Estate Professional Status:
If you added some real estate investments this year, consider qualifying as a real estate professional for tax purposes. Meet the 750-hour annual requirement and the material participation test, and you’ll be able to use paper losses (created by bonus depreciation or other expenses) to reduce your W-2 or active income, something that can result in major year-end savings for the right clients.
- Don’t Overlook 1031 Exchanges:
A 1031 exchange lets you defer capital gains taxes by “trading up” into new investment property. The key is documentation and timing, work with a qualified intermediary and your CPA so you don’t risk losing this powerful benefit. There’s flexibility here, including in partnerships, DSTs, and partial ownership, and now is a smart time to explore your options.
December isn’t just for holiday celebrations. Meet with a tax-savvy real estate CPA now to review your 2025 activity and lay the groundwork for 2026 to make sure you’re getting every deduction to which you’re entitled.
As always, I’m Sandra Garcia, dedicated to helping Bergen County Buyers, Sellers, and Investors make the most of every market cycle, contact me at 201.914.0234 and for more local tips, follow @sgarcialuxuryhomes and keep your wealth working for you all year long.
