A U.S. Tax Court decision from earlier this year, Adams v. Commissioner, T.C. Memo 2013-7, illustrates the importance of the investor / tax payer receiving a fair market rent for their investment property. In the above case the tax payer exchanged into a replacement property that was rented at slightly below market rents to the…
This is review and reminder to a post earlier in the year. A 1031 exchanger must complete the acquisition of a replacement property in a 1031 exchange before midnight on the earlier of the 180th day after the date the relinquished property was transferred, or the due date (including extensions) for the income tax return for…
The IRS has issued Proposed Regulations, REG-130507-11, regarding the new 3.8% Medicare tax on net investment income imposed by IRS Section 1411. The proposed regulations affect individuals, estates and trusts.
Randyl Drummer from CoStar News reported that after months of negotiations the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) agreed on accounting rules regarding how companies should account for lease expenses on their balance sheets by agreeing on two methods instead of one unified approach. The two boards have agreed that…
There’s a relatively new U. S. Tax Court case Reesink v. Commissioner, (April 23, 2012) T.C. Memo 2012-118, that could be of interest regarding a 1031 exchange. The Reesinks, husband and wife, purchased a residential residence for investment purposes to use as a residential rental. The Reesinks after much effort over a period of eight…
Unfortunately, we may have a much better reason in a few months to do a 1031 exchange when and if the Bush tax cuts expire. However, there will likely be folks who decide to cash out and sell before the new rates take effect. Frankly, that make a bunch of sense if the new rates…
This allows investors to use all of the sale proceeds to leverage into more valuable real estate, increase cash flow, diversify into other properties, reduce management or consolidate holdings. And notice that I wrote “all of the sales proceeds”. If that rule is not followed, then you would have tp pay ‘boot’ on the proceeds…
This is part four in my series on 1031 exchanges. Keep in mind that I’m using the current capital gains rate of 15%. Depending what happens on November 6th, these number may change … radically. The tax savings versus a taxable sale comparison 1. Calculate Net Adjusted Basis Original Purchase Price + Improvements _________________ – Depreciation _________________ =…
This allows investors to use all of the sale proceeds to leverage into more valuable real estate, increase cash flow, diversify into other properties, reduce management or consolidate holdings. And notice that I wrote “all of the sales proceeds”. If that rule is not followed, then you would have tp pay ‘boot’ on the proceeds…
I’m going to create a series of posts on 1031 exchanges over the next couple of month from the basics, starting with this post to the more complex. First of course is the disclaimer: always seek professional help through your tax attorney and/or CPA before and during an exchange. I am a commercial real estate professional…
I’m going to create a series of posts on 1031 over the next couple of month from the basics, starting with this post to the more complex. First of course is the disclaimer: always seek professional help through your tax attorney and/or CPA before and during an exchange. I am a commercial real estate professional…
Given that election time is but six months away, I’m hearing a bunch of ‘what if’ discussion from clients, friends and other commercial brokers regarding potential tax ramifications with the Bowles – Simpson Plan, the Ryan Plan and the Buffet Rule and the ramifications if you choose not to do a 1031 exchange. I don’t…
I’ll roll this one out over a period of several months, but it will be as thorough as a series on 1031 exchanges as I can do. I have the first four segments done. I have no idea how many total I will have … maybe 20 or so. Sign up on my RSS feed…
As many of us are aware, unless congress takes action, the top tax rate of dividends will increase from the current 15% to 43.4% next year. That’s a top ordinary income rate of 39.5% plus the 3.8% on investment income as part of Obamacare passed in 2009. Another good reason for commercial real estate and…
http://www.irs.gov/newsroom/article/0,,id=254383,00.html It’s that time of the year again. This one is scary. It’s bad enough having your identity stolen let alone have the perp file a fake tax return and claim and receive a refund check. Identity Theft Topping this year’s list Dirty Dozen list is identity theft. In response to growing identity theft concerns,…
Thanks to Steve Rosansky, a tax and 1031 exchange specialist attorney in Southern California, for bringing this to our attention. This post is more for my Central and Northern California readers. Cost segregation can apply to many components in a vineyard and qualify for 10 year straight line depreciation. Although, this provides a nice tax advantage…
This came up twice this morning while talking with clients so I thought maybe I should try to bring a little clarity to this again since it’s about 50 posts back. Under IRS Section 1031, cash or other non-like kind property actually or constructively received by the taxpayer in a tax deferred exchange (commonly referred to…
I think 2012 will be a considerably better year for commercial real estate and an improved year for single family residential. I’m working with out of state retail buyers looking for out of state, single tenant, triple net leased or preferably absolute net leased with a long corporate lease, so in this manner, business is getting…
Linked is a US Tax Court case ruling that came down earlier this year that emphasizes the 750 + hour per year active management requirement and documentation required. Also Discussed in the IRC 469 document is the $25,000 special passive activity loss allowance. Now that were little more than a month from year end, it’s…
Continuing what I was writing about a couple days ago regarding the possible 1031 upleg chosen if a buyer in an exchange in the 45 day identification period can’t find a suitable fee simple property that meets the buyers’ other criteria such as national credit, absolute net, S&P BBB or better, etc. It’s not a…