Hartford Business Journal

www.HartfordBusiness.com • October 29, 2018 • Hartford Business Journal 11 interest deduction limitations do not apply to certain small businesses. Typically, businesses that have on av- erage no more than $25 million of gross receipts over the prior three years are eligible for what is now known as the small business exemption. Unfortunately, many real estate entities will not be allowed the small- business exemption, as they may qualify as a "tax shelter." Real estate entities may take a 100 percent interest expense deduction. However, if this deduction is made, the entity must use the alternative depreciation system for nonresiden- tial real property, residential real property and qualified improvement property. The alternative deprecia- tion system does not allow for the use of "bonus" depreciation and has longer recovery periods than typical tax depreciation. Depreciation Businesses may take 100 percent bonus depreciation on qualified property both acquired and placed in service after Sept. 27, 2017, and before Jan. 1, 2023. Full bonus depre- ciation is phased down by 20 percent each year for property placed in service after Dec. 31, 2022, and before Jan. 1, 2027. So what is qualified property? Un- der the Tax Cuts and Jobs Act, quali- fied property is defined as tangible personal property with a recovery period of 20 years or less. The tax law eliminates the requirement that the original use of the qualified property begin with the taxpayer. This "new to you" rule for the inclusion of used property is a significant and favor- able change from previous bonus depreciation rules. Edward Reitmeyer is a partner-in- charge of tax and business services with Marcum LLP , a national accounting firm with a significant presence in Hartford. "Let's say I'm a broker and I have an investor who wants to buy a factory building. I can post that on the site," Witkiewicz said. "If somebody (in the network) has something that meets that requirement, they can call me." Small-broker option Jeff Ryer, principal of Danbury-based Ryer Associates Commercial Real Estate and a user of the site, said having a data- base of market information controlled by the local real estate community is a huge draw. "Frankly, a lot of us in the industry were tired of giving data out for free and then being charged exorbitant fees to retrieve it," said Ryer. "Right now, researchers from these (national) companies call brokers and there's no incentive to give them accurate information, or any informa- tion at all," Ryer said. "The hope is that because this is real estate agent-con- trolled, people will be more enthusias- tic about putting data into the system." Connecticut joins two other New England states in adopting the Catyl- ist platform — Rhode Island and New Hampshire (whose service area includes parts of Vermont, Maine and Massachu- setts). In all, Catylist has 16,000 paying members in 49 local markets spanning 33 states and two Canadian provinces. The company also plans to launch a new website, CommercialExchange. com, in hopes of driving more traffic to its listings, Callanan said. She said the national exposure and ability to network with other Catylist members will be a good opportunity for smaller commercial brokers, who until now may have only been mar- keting their properties on their own websites. "For a very affordable cost, this is going to make their prop- erty go viral, which is incred- ible for some of these commer- cial agents," she said. Although run by GHAR, the service will be governed by an advisory board made up of commercial agents from large real estate markets statewide. Callanan said keeping prices within reach of even the smallest commercial real estate players was a priority, so GHAR isn't expecting to turn a profit on the service. "We're a nonprofit association so we're not looking to make a lot of revenue on it," she said. "We just want our members to be successful." While the site currently lacks the scale of its competition, users like Ryer are hopeful that will change with time. "Our challenge is to convince the agents and brokers that this is an alternative that has legs," he said. "It has the potential to be the go-to marketing platform … for the commercial real estate industry in Connecticut." FOCUS PDS has been meeting the needs of the construction industry since 1965. Our dedicated team of design and construction professionals welcomes the challenge of serving its past and future customers on their most demanding projects. Ware Fire Department Headquarters | Ware, MA This project was a brand new fi re department headquarters for the Department of Public Works for the town of Ware, MA. The project includes three stories and one apparatus bay with four 12 foot garage door bays. The project also included heavy concrete, sitework, plumbing, electrical, mechanical, HVAC, doors & hardware. The job was completed on time and within budget. Total Project Size: 23,000 SF 107 Old Windsor Road, Bloomfi eld, CT 06002 (860) 242-8586 | Fax (860) 242-8587 www.pdsec.com DESIGN BUILDERS • GENERAL CONTRACTORS • CONSTRUCTION MANAGERS SPOTLIGHT ON: P S PDS ENGINEERING & CONSTRUCTION, INC. THINK • PLAN • BUILD Each client's situa on is different and results may vary from those presented here CLIENT: NOT-FOR-PROFIT SCHOOL This employer froze its pension plan and wanted to con nue providing excep onal employee benefits, so it simultaneously increased its 401(k) match. Knowing this decision could upset some long-term employees, the plan sponsor turned to H&H for assistance. Get the full story at hhconsultants.com/succeed Put our knowledgeable professionals to work for your business. We offer a full range of comprehensive actuarial, investment advisory and re rement plan consul ng services designed to iden fy, achieve and exceed each client's specific need. RETIREMENT EDUCATION TO FORGE AHEAD Holly Callanan, CEO, Greater Hartford Association of Realtors Joel J. Witkiewicz, Advance Realty CT, chair of the Connecticut Commercial Real Estate Alliance

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