Must Mississippi recognize the GO Zone depreciation?
June 24, 2008
Many people want to know if the state of Mississippi must recognize the GO Zone Bonus Depreciation. The answer here, is no. There is no absolute necessity that the tax code of any state must correspond with the federal tax code.
For instance, if you buy a property classified under the GO Zone, and hold it in an LLC, then you will most likely be required to file in Mississippi for that LLC. This will also be true even if you hold the property as an individual, and not as an LLC. Also, any property-related income or loss that is reported by the LLC on Federal Form 1065K-1 will be mirrored on a federal form as well as your resident state form. While you will find an offset on the returns filed in your state of residency for taxes paid to other states, you will still need to file your returns and pay taxes.
Therefore, it is important that when you assess the tax implications of your GO Zone investment, you take into consideration not only federal tax laws, but also the tax rules applicable in your state of residency, as well as the state of Mississippi. Only when you include all these factors in your estimate, can you gain a comprehensive all-inclusive picture of your applicable tax situation.
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