The Original Realty Magazine!
Nobody has a crystal ball to foresee what, if anything, will happen to 1031 exchanges should tax reform ever actually come out of Washington. But if new legislation does hit the books – and #1031 exchanges are eliminated – what options will be left on the table to avoid or eliminate capital gains taxes?
This article presents a great summary of alternatives to…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 30, 2017 at 9:09am — No Comments
Having tenants poses a challenge for real estate investors, as we often question ourselves - Just how tough should we be on them??
We are regularly left wondering - when do we deny them or cut them a break? How do we balance occupancy with risk? What about our responsibilities to the community, and the future impact on our businesses and investments down the road?
The BP Effect
There is a lot of debate over the criteria landlords should use in screening…Continue
Added by Fuquan Bilal on August 29, 2017 at 4:00am — No Comments
Despite the IRS’ penchant for deadlines and time rules, one area where Uncle Sam doesn’t provide explicit guidance has to do with how long you must own property before relinquishing it in a #1031 exchange. In a break with their normal obsession with outlining timing rules, the tax code doesn’t provide any specific time requirements for holding property before you exchange it.
So what is an investor to do? Does the lack of codified time frames mean 1031’s are the perfect vehicle for…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 28, 2017 at 8:07am — No Comments
Before you start your #1031 exchange, there are a few very common terms that you should be familiar with. Understanding these will take the confusion out of your transactions.
Boot: This is the fair market value of any non-qualified property you receive during the exchange. It can be cash, loans, property, reduction in debt or even supplies. Basically, anything of value that you receive during the exchange could be considered boot.
Added by Dr. Robert G. Hetsler, Jr. on August 26, 2017 at 8:20am — No Comments
Unless you’re conducting a rare, simultaneous exchange, one person you’ll need to hire to help you with the #1031 exchange process is a qualified intermediary. This is the person or company that keeps you on track throughout the transactions, holds money and titles and fulfills an indispensable role to guide you away from violating the strict rules of the tax code.
The QI should be doing three key things for you throughout the 1031 exchange process.
Added by Dr. Robert G. Hetsler, Jr. on August 25, 2017 at 8:00am — No Comments
If you’re new to the world of real estate investing, perhaps you are not familiar with one niche market – tenancy in common (TIC) ownership. This is where a group of investors pool their resources to purchase investment property, and then share all the benefits and liabilities of it.
It is a great way for individual investors, who lack the resources to go it alone, to move into more lucrative investment properties.
But like anything, there are pros and cons to this type of…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 24, 2017 at 11:18am — No Comments
Added by Realty411 Magazine on August 23, 2017 at 8:04pm — No Comments
There is no denying the appeal of newly constructed triple net lease retail and restaurant locations, especially for a #1031 investor looking for a bigger and better investment. But as prices rise for these in-demand properties, does it make sense to invest via an exchange?
This article from National Real Estate…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 23, 2017 at 8:10am — No Comments
Beware The Boot
Added by Dr. Robert G. Hetsler, Jr. on August 21, 2017 at 9:55am — No Comments
We recently brought in Gerald Lucas as a part of our executive team. He has been an incredible asset. However, it also meant that it was intelligent to add new key person insurance to our business. Why does this matter? What other types of key insurances should we all have?
Key Person Insurance
Key person insurance is a type of insurance which protects against the loss of a ‘key’ or vital person. When a lot is riding on one person, it can be smart to have them…Continue
Added by Fuquan Bilal on August 21, 2017 at 3:54am — No Comments
In a previous blog, I introduced you to some general concepts about 1031 exchanges. These popular transactions allow investors to defer capital gains tax when swapping business or investment property (real or personal). I also listed a few of the key things you need to know if you are considering a 1031 exchange.
Here are four more basics that you need to…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 20, 2017 at 9:02am — No Comments
When it comes to the world of #1031 exchanges, there are many myths and misconceptions floating around out there. But if you’re planning to defer capital gains with this helpful process, you need to understand the basics.
A 1031 exchange allows an investor to swap one business or investment asset for another. Under normal circumstances, the sale of these assets would incur tax liability for any capital gains. However, if you meet the requirements of IRS tax code, section 1031 (hence…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 16, 2017 at 7:20am — No Comments
Is your investment portfolio future proof?
If you haven’t future-proofed your investment portfolio yet, then a hybrid strategy may be the key to securing your finances.
New Highs, Time to Make the Switch
It’s is great to see Dow Jones up to a new 22,000 record high, as well so many investors trying out note investing and flipping houses. It’s great to see them enjoying what they are doing, and learning to get the hang of it.
However, what I’ve found…Continue
Added by Fuquan Bilal on August 14, 2017 at 6:43pm — No Comments
When it comes to leveraging the tax-deferral power of section #1031 of the U.S. Tax Code, it is not a one-size-fits-all approach. To the contrary, the IRS has made allowances to cover a variety of situations where a taxpayer may wish to trade investment or business property and defer capital gains taxes.
The answer to the question of which one is right for you, of course depends on your individual circumstances. It is best to discuss your specific facts with your financial advisor or…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 13, 2017 at 10:26am — No Comments
If you are a real estate investor unfamiliar with the concept of a #1031 exchange, you may be wondering what all the fuss is about. But when you understand what this powerful investment tool can do for you, you may be wondering why you didn’t get involved with it sooner.
If you decide to sell or transfer investment real estate for gain without benefit of a 1031 exchange, the profit you make will usually be subject to taxation (capital gains taxes). In some cases, this tax obligation…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 12, 2017 at 8:04am — No Comments
When it comes to meeting the requirements of section #1031 of the U.S. Tax Code, one key element that the IRS will scrutinize is the taxpayer’s intent. This is especially true when it comes to determining whether property has been held for investment purposes.
With the popularity of house flipping still high, many real estate investors naturally inquire about whether their flipped properties might qualify for an exchange. However, the IRS is fairly clear that flipped properties do not…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 10, 2017 at 12:19pm — No Comments
For families who have farmed or ranched a homestead for multiple generations, one unique concern is how to adequately plan for retirement. And even though places like the wide open spaces of Montana and Wyoming come to mind, this is an especially important topic for other places like rural #Florida, where horse ranches and farms are an integral part of the overall economy.
U.S. Labor Department statistics prove what most people intuitively know – farmers and ranchers work longer than…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 9, 2017 at 6:51am — No Comments
Nothing, as it turns out.
You may have carefully planned your exchange down to the last detail. You’ve noted the deadlines and proceeded with caution. But even the savviest investor can hit a roadblock along the way.
So how forgiving is the IRS when it comes to consideration of extenuating circumstances that force you to miss a critical deadline? Not very.
Countless cases exist where taxpayers missed deadlines by just a few days and saw the IRS deny their exchange. For…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 8, 2017 at 1:15pm — No Comments
The 2017 Global Retirement Index shows America falling again. What does it mean for individual investors?
New data shows America declining on the world stage when it comes to quality of life in retirement. We’re now almost in the bottom half of countries ranked by the index. Why the decline? What essential financial moves should individuals be making now?
New Rankings Released
According to the …Continue
Added by Fuquan Bilal on August 8, 2017 at 9:46am — No Comments
Although the current Republican plan for tax reform, the Better Way blueprint, does not directly address repeal of section #1031, it does provide for immediate expensing of business investments. This is leaving many to wonder what role, if any, section 1031 would have after such a rule would go into effect.
While section 1031 would still be valuable for land transactions (where immediate expensing would not be applicable), how would such changes to the tax law affect Real Estate…Continue
Added by Dr. Robert G. Hetsler, Jr. on August 5, 2017 at 10:03am — No Comments