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Dental Tribune U.S. Edition

Why is now a great time to build your practice? deduction limit is $500,000, up from $250,000 previously, and can be used to write off the costs of purchasing new or used equipment, including new software. The 2011 limit on equipment pur- chases that qualify for the deduction is $2 million, up from $800,000 last year. In addition, the government offers a 100 percent “bonus” depre- ciation on new equipment, taken after the $500,000 deduction limit is reached. In addition, you can purchase equipment for your new practice any time during the year, and as long as the equipment is placed in service during the 2011 tax year, you can write it off for 2011 — even if you do not start making payments on your purchase until 2012. So if you’re considering building your own practice, don’t wait. Cur- rent market conditions have created an unprecedented opportunity to AD g DT page 22A If you’ve been thinking about building your own dental practice, now’s a great time to jump in. Market conditions continue to support favor- able mortgage rates and construc- tion costs, while the U.S. government has reached out to small businesses with even greater tax deductions for equipment purchases in 2011. In addition, owning your com- mercial property still appears to be a reliable and potentially profitable investment for your future. Favorable commercial property values Commercial property values are at their lowest level in decades, pro- viding purchasers an opportunity to obtain far more for their investment than they could have just a few years ago. Plus, property values are likely to increase over time as the economy recovers, making commercial real estate a relatively secure long-term investment. Commercial property can also become a potentially valuable source of retirement revenue — either through outright sale of your prac- tice and the underlying property or through sale of your practice and lease of the property, creating a life- long revenue stream. Historically low mortgage rates As with residential properties, com- mercial real estate mortgages con- tinue to be at historically low levels. Today it is possible to secure long- term commercial mortgage pay- ments that rival the rental payments for a comparable leased space. In addition, down payments for financing can be as low as 10 percent of the total loan amount if financing is obtained through an SBA program. Stable construction costs Costs for construction materials such as plywood, copper and diesel fuel have climbed during the “great recession,” jumping 5.4 percent dur- ing 2010.* Nevertheless, construction companies are still holding the line on bid prices due to intense com- petition and weak demand for their services. As demand for commercial build- ing construction increases with a recovering economy, expect con- struction costs to increase as well. Now is an excellent time to build your own practice while the costs of building remain relatively stable. Section 179 tax deduction Higher allowable IRS Section 179 tax deductions for 2011 mean your investment in building your prac- tice actually costs less. The 2011 DENTAL TRIBUNE | July 2011 Industry 19A