Investment Analysis and Taxation of Income Properties 收益性房地产的投资分析和税收制度 This chapter introduces concepts and techniques important in the analysis of real estate income property. We will discuss ways of projecting cash flows for an investor and ways of evaluating those cash flows with various measures of investment performance. The performance measures we discuss in this chapter ( IRR, NPV, DCR, etc.) will be used throughout the remainder of the text. Although the techniques in this chapter provide a good initial analysis of a project, as we will demonstrate by the office building example, many questions remain to explore in more depth. For example, How will taxes affect the performance of the property? Are there alternative ways of financing the property that would be better? The remaining chapters in this part of the text will cover these and other questions. Another area this chapter covers is the key tax considerations that affect real estate investment decisions. These considerations include determining the appropriate marginal tax rate, rules for depreciating real property, calculation of taxable income from operation of the property, and calculation of capital gain. These tax considerations will enter into different types of analyses that we will address in many of the remaining chapters of the text. In several cases we will be applying the tax rules introduced in this chapter to see how they affect investment. We will consider issues such as, What is the optimal time to dispose of a property? and, Is it profitable to renovate a building? Additional tax considerations, such as the taxation of limited partnerships and development projects, will also be introduced in future chapters. Remember, however, that tax laws are subject to revisions that can have a substantial impact on the calculation of taxable income and taxes for real estate income property. Thus, this chapter is not intended to be a substitute for a comprehensive analysis of how current and future tax laws may affect a specific investor. It does, however, point out the general issues that investors should take into consideration regardless of the specifics of the tax law in effect at a particular point in time.