Unlocking $200,000+ in Tax Savings Through Real Estate Grouping
Reclaiming Trapped Deductions for a Physician Practice
Many physicians own both their medical practices and the buildings they operate from, yet the tax benefits of that real estate often go unused. Superstein PA partnered with a physician-owned practice to identify a structural tax issue that was preventing valuable deductions from being applied.
Client Profile
- Industry: Medical Practice
- Annual Net Income: ~$2M
- Ownership Structure: Physician-owned practice and medical office real estate
The Challenge: Real Estate Losses Going Unused
Although the real estate generated significant depreciation and losses, those deductions could not offset active medical income due to how the activities were classified for tax purposes. As a result, the physician paid taxes on income while meaningful deductions remained trapped.
The Superstein Strategy
Superstein PA implemented a real estate grouping election, treating the medical practice and related real estate as a single economic activity under applicable tax regulations. This restructuring allowed depreciation and real estate losses to directly offset practice income.
The Results
- $600,000+ in previously unusable deductions unlocked
- $200,000+ in tax savings in year one
- Meaningful reduction in taxable medical income
“This wasn’t about creating new deductions. It was about unlocking the ones already there. When real estate and operations are structured correctly, the tax impact can be immediate.”
~Drew Superstein, Managing Partner
Why This Matters
Physicians who own their buildings may be leaving substantial tax savings on the table. Proper structuring can turn real estate into a powerful tax shield instead of a missed opportunity.
Not tax advice. Results depend on individual facts and structure.