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 _________________ =…
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…
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…
This is the last reminder because valuation appeals are accepted from December to March 31. Your chances of winning are about half so it’s well worth doing, but must be done correctly and very soon. It’s the 27th so get moving. Lock your new, hopefully lower, valuation in for three years. Take a look at the…
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,…
Just a reminder. Valuation appeals are accepted from December to March 31. Your chances of winning are about 50 – 50 so it’s well worth doing, but must be done correctly. Lock your new, hopefully lower, valuation in the for three years. Take a look at the short article at the link. Columbus Realtors.com – News…
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…
I few posts ago I promised that I would go into greater detail regarding aspects of a commercial lease that the prospective buyer needs to examine carefully. Without the underlying leases the property is worth replacement costs and comps of similar vacant property. Given that the cash flow of the leases in place is what…
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…
Given that fee simple, single tenant, single parcel, national credit, long corporate triple net or absolute net leased retail opportunities are as hot as they are for 1031 exchanges, buyers are looking at alternatives such as purchasing leasehold interests or a fee simple ground lease. I’ll cover leasehold interests in this post and get into…
I’ve written plenty about triple net, in fact absolute net, single tenant, national credit, long corporate lease retail over the last few months, but what if the purchase is for a buyer under the gun of a 1031 upleg. I’ve known buyers under a bunch of stress during this process It’s actually a very good…
This is an informational post for landlords and property owners brought to our attention by Randyl Drummer at CoStar News. Commercial real estate owners and landlords have been excluded from proposed accounting standards changes to require capitalizing real estate and equipment leases on their balance sheets. The International Accounting Standards Board (IASB) and the U.S.-based…
Good question Steve. 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 as “boot”) causes the taxpayer to recognize gain to the extent of such boot. Loan proceeds received by the taxpayer generally aren’t considered boot unless its determined…