A wise investor’s vehicle for deferring capital gains taxes or depreciation recaptures, 1031 exchanges were first adopted by the IRS in 1954. That’s when the present day definition of a like-kind exchange was adopted. Decades later, there are still many misconceptions about how these exchanges work. • Like-kind means “exactly the same.” The IRS requires… Continue reading Misconceptions About 1031 Exchanges
On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act, enacting sweeping changes to the U.S. tax framework which took effect at the beginning of 2018. The new tax framework had one major change to Section 1031 of the IRS tax law: no longer can personal property, including franchise licenses, machinery and… Continue reading The New Tax Law and Like Kind Exchanges
Internal Revenue Service tax code 1031 relates to real estate exchanges, allowing investors to defer capital gain tax payments on the sale of the property by reinvesting the proceeds into another business or investment. It is one of the most underutilized sections of the tax code, even though it offers many benefits to investors who… Continue reading What I Learned About 1031 Exchanges That Can Help You, Too
How Safe Is My Investment? You’re aware of all the benefits of using a Delaware Statutory Trust as an investment vehicle for a 1031 exchange. You’re thrilled at the capital gains tax savings the investment will give you, and relieved that your property management responsibilities will be limited—a professional manager will deal with tenants and… Continue reading DST Q & A
Cash-on-cash return is a key part of evaluating commercial real estate investments. But is it enough? Most investments, such as stocks, are assessed by return on investment, or ROI, but because you can’t know how much a rental property will bring you in total before you sell it, using an ROI to evaluate a commercial… Continue reading Evaluating Investments Through Cash-on-Cash Return
It’s a real estate investors’ dream—a property that highly appreciates in value over time. The downside to that dream, though, is the prospective hefty capital gains tax bill which can either trap that wealth in the property, or force the investor to pay a heavy price to the IRS upon the sale of the property.… Continue reading Capital Gains Tax Deferral Through 1031 Exchanges
Investors considering placing their equity in a Delaware Statutory Trust should consider all the benefits. Contractual Freedom In most DSTs, the parties define their business relationship to best suit their own needs. Investors do not have to unanimously agree The signatory trustee holds the power to take any necessary actions to reduce loss. The trustee… Continue reading Why Purchase an Interest in a DST?
Historically, a statutory trust is created so that a property can be held by multiple parties, for rental purposes or sale, at their discretion. All income from the property prior to its sale, and all proceeds of its sale, are then held in trust for the beneficiaries. In 1988, the state of Delaware enacted the… Continue reading What Is a Delaware Statutory Trust (DST)?
If you’re an investor looking to grow your portfolio, 1031 exchanges are something you should know about. What is a 1031 Exchange? Defined by the IRS Simply, 1031 is a tax code that allows an investor to defer capital gains taxes by reinvesting the proceeds of one business or investment asset into another. Through 1031 exchanges,… Continue reading What Is a 1031 Exchange?