Investors Come Out on Top in 2003 Tax Cut

    DENVER, June 9 /PRNewswire/ -- The rumors are true.  President Bush signed
into law the Jobs and Growth Tax Relief Reconciliation Act of 2003 on May 28.
Here are the highlights and what they mean to those in real estate:

    Individual Income Tax Rates Slashed
    Individual tax rates will be effective retroactively to January 1, 2003.
Reductions will be from 27% to 25%; 30% to 28%; 35% to 33% and 38.6% to 35%.
The 10% tax bracket is expanded by $2,000 for couples and by $1,000 for
individuals.  Good news -- our regular income will be taxed at a lower rate
than last year!

     Companies Buying Assets Get a Break
     Bonus Depreciation
     The new legislation provides incentive to buy depreciable assets.  On
assets purchased after May 5, 2003 and before December 31, 2004, larger
companies can claim an up-front tax deduction for 50% of the cost, up from
30%.  The Conference Report clarifies: "the adjusted basis of qualified
property acquired by a taxpayer in a like-kind exchange ...  is eligible for
the additional first year depreciation."  Real estate is not eligible, but
most other assets in a like-kind exchange will qualify for this bonus
depreciation.

    Small Business Expensing
    The new legislation increases the amount of first year costs that can be
written off in lieu of depreciation.  Companies putting up to $400,000 of
assets in use this year can write off up to $100,000 of the cost of
equipment -- twice last year's limit.

    Changes to Capital Gain Rates
    Dividends will be taxed as capital gains.  The 10% rate for lower income
earners will be cut to 5% for 2003-2007.  The maximum rate on capital gains
has been lowered to 15% from 20%.  The new rates take effect for sales of
capital assets on or after May 6, 2003.  For example, the sale of a capital
asset generating $500,000 in gain produces a capital gains tax liability of
$75,000 under the new legislation, still making the value of the 1031 Exchange
considerable.
    As real estate and 1031 Exchange professionals, we must inform our clients
and the industry of this new legislation which can mean big savings for real
estate investors.

    Chad Greenberg, CPA/PFS is a consultant for Investment Exchange Group
(IXG).  IXG, a nationwide qualified intermediary, provides a full range of
services for 1031 Exchanges, including complex exchange techniques.  Call
800.908.1031, e-mail chad.greenberg@ixg1031.com or visit http://www.ixg1031.com .