Concerned second home owners are looking for ways to minimize tax exposure when selling their second/vacation homes. Many have owned these properties for years and are facing serious tax implications. It may be wise to convert second homes to investment property, then complete a 1031 exchange to defer all capital gains taxes.
The optimum real estate investment is one that makes you smile everyday of the week, including weekends. The road to investment wealth is paved with simple tenets (not tenants); buy what you know, do your homework, hold your position, know when to sell, diversify your holdings and NEVER pay capital gains tax. If you lay […]
Consumers shopping for financial services have for too long relied on the oversight of various regulatory agencies to provide a safe and secure business environment. The mark of a few initials (BBB, SEC, FDIC, etc.) has been considered insurance enough that individual firms are reputable and trustworthy. The meltdown of the financial markets in 2008 […]
Taxpayers contemplating using the provisions of Internal Revenue Code Section 1031 are well advised to audit proof their transactions. The mere fact of including Form #8824 as part of the supplemental schedules in a taxpayers tax return will not give rise to the return being pulled for audit by the Internal Revenue Service (IRS). The […]
When conducting Section 1031 transactions with a related party the simple rule is that you can sell to a related party, but you cannot purchase from one. The IRS rationale is that the taxpayer is essentially “cashing out” or basis shifting in related party transactions. Exchanges between related parties can be conducted under special circumstances; […]
In spite of decreasing real estate values across the nation, real estate investors continue to come up with innovative ways to make their investment turn out profitably. A powerful method for building real estate holdings is the use of 1031 Exchanges, which lets investors defer capital-gains assessment on investment property by reinvesting sale proceeds into […]
There seems to be a lot of confusion from clients and professionals alike on the qualification criteria for Section 1031. Over the years we have answered many very basic questions and have put together this quick qualification tool. We call it “The Wheel”, click on the graphic below to see if YOUR situation makes sense […]
In its simplest terms, Qualified Intermediaries (QI), facilitating Section 1031 Exchanges, act as a third party in the sale of Relinquished Property (old property). The QI’s job is twofold: a) memorialize and document the intent of the taxpayer and b) function as escrow agent for the net proceeds from sale. Section 1031 is a tax […]
Section 1031, Tax Deferred Exchanges, can be used in concert with or as substitution for Section 1033, Involuntary Conversions- when a property is completely or partially destroyed by fire, natural disaster, theft or seizure or other taking or condemnation, including the disposition of the property upon threat or imminence of condemnation or eminent domain. Section 1033 […]
