Would you like
to print a copy of this book to read offline? Click Here to download the printable PDF version |
 |
01. This Book
02. Syndicate Boom
03. Get Information
04. Syndicator
05. How much?
06. Depreciation
07. Depreciation Applied
08. Declining Balance
09. Straight Line
10. Paying Taxes
11. Pay Mortgage
12. Income Taxes
13. Paper Loss
14. Tax Shelter
15. Rent?
16. Syndicator Units
17. Wear + Tear
18. Lease-Hold
19. Building
20. Comparison
21. Specialized Properties
22. Growth
23. Leverage
24. Share Growth
25. Why + How
26. Syndicate Agreement
27. Net Lease
28. Long-term Lease
29. No Guarantee
30. Inflation Clauses
31. "Inflation Clause" Works
32. Inflation Clause?
33. Mortgage Due
34. Interest Rates
35. Short Term Mortgage
36. Good Mortgages
37. Refinancing
38. Refinancing Clauses
39. Share of Mortgage
40. Share of Profit
41. Purchase Options
42. How Purchase Options
43. Stunt the Growth
44. "Subordination"
45. Long Term Lease
46. Business Organizations
47. Syndicate Debts?
48. Management
49. Your Consent?
50. Sell Your Unit
51. Investment Trust?
52. Business Syndicate
53. Multiple Properties
54. Dream or Reality?
55. Syndicator's Background
56. Value of Guarantees
57. Look for Yourself
58. Conclusion
Resources
9. Straight Line Depreciation
In some cases the syndicator will take the same depreciation allowance every year. If the syndicator adopts the straight line method of depreciation it will be stated in the brochure. The following is an example of the straight line depreciation taken from a syndicate offering brochure.
The following table provides a breakdown of the cash distribution to a holder of a $10,000 Participation during the first year of ownership:
Cash Distribution |
Portion Constituting Reportable Income |
Portion Representing Return of Capital |
Percent of Cash Distribution Reportable |
$1,020 |
$684 |
$336 |
67.1% |
The same breakdown will apply to each cash distribution received in the second through twenty-fifth years. The buildings will be fully depreciated at the end of the twenty-fifth year, and the entire amount of cash distributed thereafter will be reportable as income.
When you see a similar statement or computations you may assume with reasonable certainty that for 20 or 25 years the same percentage of your distributions will be subject to federal income taxes, unless the income of the syndicate goes up. If that is the case, the additional income will probably be fully taxable.
Are You Ready To Move Onto The Next Lesson? Click Here...