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December 2017 Commercial Newsletter

December 2017 Commercial Newsletter

Download Complete Newsletter | Volume 5, Issue 12

Planning Your Commercial Real Estate Strategy for 2018

With the Holiday Season now being upon us, and with there oftentimes being a natural feeling ofslowing down during the Holiday Season, this canbe the perfect time to create your commercial realestate game plan for 2018.

So what is it that you want to accomplish within commercial real estate? Do you want to buy a building? Do you want to invest in property? Is there a lease coming up for renewal that needs your attention? Or could it be time to consider refinancing a loan? These are the kinds of questions that it’s good to be asking yourself, because this is the time of year
when you’re more likely to have the time to address these subjects, and plan your strategy accordingly.

One of the best ways to begin this process is to brainstorm everything that you want to accomplish within this arena in 2018, and write these things down on a list. Then prioritize these items in the order of importance, and design the game plan to accomplish each one within 2018. In addition, this is also a tool that can be utilized for accomplishing any goals that will be important to you within 2018.

Then once you have your game plan designed for accomplishing each of your goals, it will now come down to focus and accountability. With this in mind, write down the goals that you’d like to accomplish by the end of the first quarter of next year, which will be goals that will be in alignment with everything that you want to accomplish within the entire calendar year. These first quarter goals will thenrepresent the important stepping stones that you’ll want to accomplish within that timeframe, which will then make solid progress towards you accomplishing your goals for the entire year.

Then as you’re working through the first quarter, be looking at that list of goals to accomplish within the first quarter, and schedule your activities within those weeks to make sure that you’re accomplishing those goals. Along the way, at least once a week, look at that list of your first quarter goals to make sure you’re on track towards accomplishing them, then make any necessary adjustments to your weekly activities.

So then at the end of every quarter, set new goals to accomplish by the end of that next quarter, that will be in alignment with you accomplishing your overall goals for the year, and continue on in doing what was recommended to you for remaining focused and on track during your first quarter.

Tax Changes Are Coming Next Year, but You Can Plan for Them Now

The New York Times

The Senate and House may spend most of the month ironing out the differences in their tax bills. Or they may be delayed by other legislation and not enact a new tax code until the new year.

Either way, high-earning taxpayers cannot afford to wait and see what happens; they need to act this month before certain opportunities go away. And betting on a delay in a final vote is not wise
planning: Accountants predict that the new code will take effect on Jan. 1 even if it has to be made retroactive at some point next year.

The two tax bills have differences for sure — the most obvious being the Senate’s seven tax brackets to the House’s four. They also have more nuanced discrepancies, like how they treat mortgage interest deductions and small businesses whose owners pay their company’s taxes on their own returns.

But the higher standard deduction — at least $24,000 per couple, up from $13,000 — and the absence or limitation of these other deductions could also lessen the tax benefits of charitable deductions. A more arcane provision in the Senate bill — regarding blocks of stocks bought at different times — could make the benefits of harvesting tax losses, a staple of basic financial planning, harder to accomplish.

“The loss of some of the deductions will go a long way toward tax simplification but not necessarily toward tax savings,” said Timothy M.Steffen, director of advanced planning at Baird, a wealth management firm. “It’s going to be easier to figure out how much more you’re going to have to pay.”

For those who would like to take advantage of tax benefits now, here are strategies they can follow.

Pay property taxes early. Both the House and Senate bills allow for $10,000 in real estate tax deductions, which is high enough for
taxpayers in many states.

Nine counties in the United States with populations of 100,000 or more, however, have an average real estate tax that exceeds that amount,
according to an analysis by Attom Data Solutions. No. 1 is Westchester County, outside New York City, at $16,500 a year. The other eight
are in New Jersey, New York, Northern California and Southern Connecticut.

There are 32 additional counties — in Illinois, Massachusetts, Virginia and Massachusetts — where the average property tax is $7,000 or
more, meaning people who own larger homes in those areas will feel the bite.

Most municipalities set property tax rates in the middle of the year. Homeowners either pay them as part of their mortgage or directly to
their town semiannually. If the latter is the case, advisers say to pay the installment due in early 2018 now. And if the taxes are paid as part
of the mortgage payment, they advise checking with the bank to make sure the tax is paid this month and not in January.

Prepay state taxes. Advisers suggest paying state taxes early, to the extent that is possible, by making an estimated tax payment for what is
owed this year. This is something that affects more people, because 41 states tax earned income.

Joseph J. Perry, the tax and business services leader at Marcum, a national accounting firm, said his firm was exploring a novel strategy for
clients to prepay New York State tax for the first, second and third quarters of 2018. He said it appeared to be allowed under a mechanism
in the state tax code.

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