Mitigate Your Taxes with Bonus Depreciation
The Motor Fuels Tax Advantage Explained
Under the Tax Cuts and Jobs Act (TCJA), the government offers special tax treatment for properties where more than 50% of revenue comes from fuel sales.Immediate Tax Savings
In simple terms: When you invest in qualifying gas stations or convenience stores, you can write off 60% of your investment immediately, rather than waiting decades.investments that qualify for bonus depreciation.Properties That Qualify:
in the motor fuels space
Properties that qualify:
Gas stations
Truck Stops
Convenience stores (c-stores) with fuel sales
Quick-service restaurants (QSRs) connected to fuel sales
Properties that DON’T qualify:
Stand Alone Convenience Stores
Mobile Home Park
Vacant Property
Car Washes
Example Investment Strategy
Acquisition of Eligible Properties
Long-term Fuel Supply Contracts
Sale-Leaseback Transactions
Debt Service Coverage (DSC) Loans
Example Of Financial Outcomes
Assume a property valued at $1,000,000 where 95% is attributed to improvement value:
65% leverage on the property
60% bonus depreciation and a 15-year depreciation schedule
With an investment of approximately $587,906, an investor can effectively offset a $1,000,000 gain, retaining around $412,094 in non-taxed cash for other opportunities.
Investing in the motor fuels industry with a focus on bonus depreciation provides unique tax advantages and investment opportunities for investors with passive income or passive gains. By strategically acquiring eligible properties and leveraging long-term contracts, investors can maximize their returns while benefiting from favorable tax regulations.
As always, it’s advisable to consult with a tax professional or financial advisor to accurately assess risks and benefits associated with specific investment opportunities.
Is a Bonus Depreciation in Motor Fuels Investment right for you?
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Unlock the Benefits of Motor Fuel Depreciation
Our easy-to-understand guide explains how regular investors are using motor fuels properties to:
- Slash their tax bills immediately rather than paying the IRS
- Keep more of their money working for them instead of giving it away in taxes
- Own part of stable, everyday businesses that generate steady income
- Create a path to future tax-free property exchanges
- Potentially earn attractive returns while lowering their tax burden
Download our free guide to see if this powerful tax strategy could work for you!
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