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.
The National Association of Realtors sums it up pretty well in the attached August 2012 Commercial Real Estate Outlook when they opine that the economy has gone on vacation. That’s pretty much how I would describe it too. True, the triple net or absolute net, single tenant, national investment grade credit tenant retail is still…
I’m not saying that we’re quite back to pre crash levels of pricing but we’re getting there. Given the general malaise in the American economy with job growth, GDP growth and most other indicators, it’s surprising that the commercial real estate recovery has been as strong and broad based as it has. It didn’t start…
7I’ve been writing about this topic for most of the last 18 months. There is very little supply out there of the triple net or absolute net, single tenant, national credit retail opportunities, and that is of course what everyone wants. And what is available gets highly competitive and results in multiple offers and stupid…
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…
Today, I’m going to take a look at the preferred type of product for most of my buyers, and frankly for most buyers on the market these days, and that is triple net or absolute net, single tenant, single parcel, corporate leased retail. We’re talking the Wal-Mart’s, Kohl’s on the large end. Walgreens and CVSs…
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. See attached for calculations One of the primary advantages of a 1031 exchange is not just the tax savings, but…
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 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…
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…
Many folks are aware that Starwood Capital Group agreed to acquire $1 billion in seven shopping centers from Westfield and KKR. As Starwood is starting to acquire retail commercial real estate we expect other REITs to do the same across the country as an expected surge in new retail properties are expected to hit the…
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…
I read an update from the 1031 exchange specialist, Steve Rosansky, regarding increased inflation in the near future and using commercial investment real estate as a hedge. We’re starting to see the signs of increased inflation with commodity prices up about 7% in the last year and food prices up 20% in the same period. …
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…
CoStar’s monthly National Composite Index of Commercial Real Estate increased for the seventh consecutive month in November 2011. I know its January 19, 2012, but it takes them around 45 days to get the numbers out to us. Leading the price recovery again has been investment grade property. There’s nothing new there as I’ve been writing…