Many people in Texas find that investing in commercial property is a fruitful means of earning income. Some people do this as one element in their overall investment and business strategy while others focus on commercial real estate solely. Regardless, it is important to plan wisely before making any property purchase.

As explained by, there can be significant tax implications to a commercial real estate purchase based on many factors, but there may be ways to minimize some tax liabilities. Some people have benefited from a 1031 exchange that allows a property owner to defer the payment of capital gains taxes if they essentially swap out the property for one that is of like kind.

The new Tax Cuts and Jobs Act has created another option for the deferment of capital gains taxes in the form of the Opportunity Zones program. These zones are areas identified as in need of economic redevelopment. If an investor sells a commercial property and then invests the profits into the fund that supports this redevelopment, the capital gains taxes that would have been owed may be deferred all the way through the end of the year 2026. Some properties may be able to be depreciated due to age and taxes may be avoided if a sale price is less than the depreciated value.

If you would like to learn more about how to evaluate your options for maximizing a commercial property investment and balancing any profits with potential tax responsibilities, please feel free to visit the commercial real estate investing and tax strategy page of our Texas real estate website.