After talking about it since before the 2016 elections, Congress passed the Republican tax reform bill, HR.1, the "Tax Cuts and Jobs Act" on Wednesday, December 20, 2017 and President Donald Trump signed the bill into law on December 22, 2017. The legislation will take effect January 1, 2018.Read More
As the year winds down, many of us are beginning our annual list of resolutions and evaluating our goals. For some, our goals might include the purchase of a vacation home, diversify our real estate portfolio, increase our revenue stream, retire and maybe even find more time to enjoy life. Yes, they all sound great but for those that currently own investment property, a 1031 exchange may help you accomplish these goals!Read More
The real estate market remains hot, which is very advantageous to sellers. To help avoid the stress sometimes associated with identifying replacement property within the 45-Day Identification Period, Exchangers are encouraged to look for replacement property once their relinquished property is under contract with a seller. No doubt, the 45 days go by quickly, but using the time between going under contract and the actual closing typically gives you 45-60 days before the timeclock starts clicking. This timeframe is before your 45-Day Identification Period ever starts, which gives you that extra time to navigate the identifications rules.Read More
This Free for all Friday addresses 1031 CORP.'s ongoing commitment to bring like-kind exchanges to Pennsylvania.
Topics: benefits of 1031 exchange
On this Wealth Building Wednesday, we are talking about PA Gov. Tom Corbett and a proposed state budget that making those of us in the 1031 exchange industry giddy! Pennsylvania has long been one of the few states that does not recognize 1031 exchange or have a similar provision to allow the deferral of state income tax on the exchange of assets held for business use or investment.
Topics: PA Income Tax and 1031
By none, we have all heard quite a bit about the American Taxpayer Act of 2012 and the new 3.8% Medicare Tax. Now let’s take a look at an example and see how a 1031 tax-deferred exchange might benefit the seller:
This Tuesday’s Tip reminds everyone that 1031 tax-deferred exchanges between related parties should be carefully considered as these types of transactions have received considerable attention from the IRS recently.
Topics: related party 1031 exchanges
This Tuesday Tip looks at how the earnest money deposit for the replacement property in a 1031 tax-deferred exchange should be handled. If 1031 CORP. is holding the exchange funds, the deposit can be withdrawn from your exchange account provided the Agreement of Sale with the seller of the replacement property is assigned to 1031 CORP., as the Qualified Intermediary. The Assignment is often included when the Agreement of Sale is signed but if it is not, it can be signed by the Seller at any time in order to have the deposit paid from the exchange account. If for whatever reason, the Assignment cannot be signed by the Seller, 1031 CORP. can prepare a written notification of the assignment and have it delivered to the Seller. The notification will include a hold harmless clause assuring the Seller the 1031 exchange will not affect the Seller in any way or increase the Seller’s costs.
Our Tuesday Tip is an important one – especially now. While 1031 CORP. has always suggested you discuss your situation with a tax advisor to determine the best you to proceed, that suggestion is more important than ever now that the tax rates have changed. Completing a 1031 tax-deferred exchange can defer the capital gains and 3.8% Medicare Tax as well as the depreciation recapture but now exchanges can help keep you out of the 20% capital gains and dividend tax brackets and the new 39.6% income tax bracket. Exchanges can also help avoid the personal exemption phase out and the Pease Tax. (Summary of new tax bill)