Real Estate and the 1986 Tax Reform Act
Baugh, Brian W.
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The 1986 Tax Reform Act has made sweeping changed in the nation's tax code. While the Code has been totally revamped, the investors of real estate seem to be the main target of the Act. Changes in capital gain treatment, depreciation, limits on passive loss deductions, limits on investment interest deductions, and the extension of the at-risk rules to real estate have dealt a severe blow to the real estate investor. Thus through the Act Congress has virtually eliminated the real estate tax shelter. Moreover, while the Act has immediate effects on real estate, the enormous revamping will probably effect real estate in many other ways through other Code provisions. The long-run effect on real estate has yet to be determined.