QUESTIONS When should you use a 1031 Exchange? There are two main questions to ask yourself: 1) Will I incur capital gains tax when I sell my investment property? 2) Do I want to purchase a replacement property? You may also want to utilize a 1031 exchange to carry out a mix of business strategies.… Continue reading When can you use a 1031 exchange in real estate?
The United States Congress enacted the first exchange statute through the Revenue Act of 1921. The act, which allowed both like-kind and non-like-kind exchanges for a legal, regulated tax-deferred exchange had three purposes: To avoid unfair taxation of investments in property that are ongoing To encourage active reinvestment For administrative convenience The third became irrelevant… Continue reading The History of 1031 Exchanges
On paper, your real estate investments have been a great success. You bought three rental houses 20 years ago for $150,000 each. They’re now fully depreciated, and you can net $450,000 on each. You’ve been a good—and sometimes great—landlord. So what’s not to love. The calls at 1 a.m. because the boiler shut down on… Continue reading Delaware State Trust for Landlords Who Are Tired of the Management Hassles
The Treasury Department governs 1031 exchanges, and they’ve made one thing very clear: These are not do-it-yourself real estate ventures. In fact, you won’t be able to use your parents, child, or sibling, or even your attorney, real estate agent, or CPA as a middle person in the exchange and still expect to defer capital… Continue reading What Is a Qualified Intermediary?
Do you have remainder equity from a real estate exchange? Are you looking to maximize its potential while saving yourself a hefty tax bill? A Delaware Statutory Trust can be the perfect vehicle for meeting your investment needs. Why DST? It’s a business entity, through Delaware state law, that allows investors to take a fractional… Continue reading Delaware State Trusts for Remainder Equity
One of the most important decisions you’ll make as a commercial real estate investor is determining how to structure your borrowing. Commercial real estate investors usually have two types of loan financing options: recourse debt and non-recourse debt.
The state of Delaware has a strong history of innovation in protecting the personal wealth of both residents and non-residents through both its corporate laws, and its trust statutes. The state’s work in trust law has helped investors maximize their investment return while protecting it from creditors and saving income tax. In addition, because the… Continue reading DST for Small Equity Investors
Investors who start their 1031 exchange transactions on a high note can often find themselves plummeting when faced with unexpected challenges. A Cautionary Case Study Michael Englesworth had $2M in real estate equity to exchange. He identified a good property and was ready to nominate it. Excited to move forward, he believed the process would… Continue reading The DST Advantage
There are a variety of benefits to 1031 exchanges, which allow investors to sell or relinquish property and acquire replacement property and gain significant tax advantages. 1031 EXCHANGES DEFER CAPITAL GAINS TAXES Clearly, the primary benefit of a 1031 exchange is the ability to avoid hefty capital gains taxes on the sale of a business use… Continue reading Benefits of 1031 Exchanges