We recently purchased a new home and our real estate agent was a key part of the process. Whenever buying or selling a property, advisors such as your real estate agent and accountant are crucial. This Thankful Thursday, we discuss the role of your professional advisors and why they are an important part of your 1031 tax-deferred exchange.Read More
I recently purchased a new home and have started thinking about long-term investment goals including eventually converting my home into a rental property or even keeping it as a second home. There is another tax strategy that I could take advantage of down the road. Today’s Wealth Building Wednesday discusses the principal residence exclusion which allows homeowners to have a gain on the sale of their primary residence.Read More
When Exchangers call our 1031 CORP. Exchange Team they often ask us what assets qualify as like-kind replacement property in a tax-deferred exchange. Rental units, office buildings, duplexes and warehouses are typically properties that come to mind. This More, More Monday addresses oil, gas and mineral rights, lesser-known assets that are growing in popularity among Exchangers.Read More
With subtropical storm Alberto blasting the southeastern corner of the U.S and hurricane season right around the corner, it is important to know how Mother Nature’s unpredictability can affect your tax deferred exchange. Today’s Thankful Thursday addresses Section 17 of Revenue Procedure 2007-56 which provides extensions to exchange deadlines if you are affected by a federally declared disaster.Read More
Every day we receive calls about how a 1031 tax-deferred exchange works and what steps are involved. On this Friday Free for All, I want to take a look at the exchange process and how simple it really is. In fact, it is simply the sale of business use or investment real property followed by the purchase of like-kind property linked together by paperwork.Read More
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
Section 1031 exchanges are for properties held for investment or for use in a trade or business. Personal use properties do not qualify even though everyone would likely agree that virtually all real estate is acquired for future appreciation. Under Section 121, home owners can qualify for a $250,000 ($500,000, if married filing jointly) exclusion when selling property used as their primary residence for at least 24 of the last 60 months. Unfortunately, for vacation home owners, there is no easy way out unless you have time and patience to implement a plan.
When it comes to taxes, the term “portability” does not sound like a good thing. As part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (The “ACT”), portability is a GREAT thing! It is the concept in which a surviving spouse is allowed to use his/her deceased spouse’s unused estate tax exclusion.
We are often asked 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 your the Qualified Intermediary. The Assignment is often included when the Agreement of Sale is signed but if 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.