Tax filing season is just weeks away, but real estate investors, commercial property owners and developers still have tax-saving options they may not have considered.

Realty Times talked last week with one of the country's top real estate tax advisors, John Michel, national real estate tax partner for the accounting firm of Grant Thornton, to get his advice.

Unlike some CPAs and tax lawyers, Michel puts his expertise to work in his own investing -- he just recently bought an office building in downtown Cincinnati -- so he knows the practical aspects, not just the rulebook.

Here are some of the key areas Michel suggests fellow investors focus on right now:

Gear up to challenge property tax assessments more aggressively. Commercial property values and rent rolls aren't rising in most parts of the country at the moment yet tax assessors are under pressure to produce maximum revenues for municipalities and counties.

So play it smart: "You've got to be ready with the hard facts" on negative market changes, says Michel -- tenants moving out, tenants unwilling to pay higher rents, retail sales down-all of which relate to property valuations.

Among the key areas of assessments to challenge, according to Michel: Non-real estate elements of your property -- everything from electric signs to equipment and fixtures to lighting systems and other depreciating mprovements you've made.

Michel also urges clients to make maximum use of so-called "green" tax incentives, at the federal and state levels. For example, Congress recently extended special tax writeoffs for energy improvements -- insulation, lighting and heating and air conditioning systems -- that can save you a lot.

Congress also approved extensions to expiring tax credits for certain solar energy panel installations, which are especially valuable in parts of the country with lots of sunlight most days of the year that can be sold to tenants or back to the local utility grid.

Michel also recommends that in the current recession, property owners be prepared to claim "abandonment losses" on spaces vacated by tenants where improvements were made specifically for those tenants and can't be reused. If the improvements have not been fully depreciated, building owners may be able to claim sizable deductions in the wake of the tenants' departures.

Finally, Michel advises property owners to keep a close eye on Congress. The new stimulus package may well offer tax benefits that you can put to immediate use, including a restoration of last year's "bonus depreciation" writeoffs for certain equipment you install, plus "weatherization" energy conservation credits for commercial property owners.

Published: January 16, 2009

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.