The Employee Retirement Income Security Act of 1974 (ERISA) introduced the individual retirement account. And, the IRA became popular with help from the Economic Recovery Tax Act of 1981. These days, IRAs are positioned to help individuals save for retirement, with tax-deferral advantages.
There are two different ways to generate income — active and passive. One is a time for dollars trade-off while the other is able to generate income without your direct involvement. There are many differences between these two types of income, and choosing one over the other doesn’t mean one is better than the other. Sometimes the choice is a personal preference, and sometimes it's out of necessity. In this article, we’ll go through the differences between these two types of income.
In the U.S., 2020 has brought a broad-based decline in commercial real estate due to COVID-19. Any business deemed non-essential has taken the brunt of the slide. Office leasing, retail, and other non-essential companies have seen their revenues dry up — and the astronomical drop in travel has led to the decline in hotels and other hospitality properties. But one area that hasn't completely stopped all activity is construction starts.
The successful consummation of a Section 1031 Exchange requires the taxpayer to follow IRS guidelines that are broad in some respects and specific in others. Some tax advisors refer to 1031 as one of the more generous provisions of the internal revenue code, offering real estate investors an unparalleled chance to preserve and grow wealth by deferring recognition of capital gains. The broad guidelines are the “like-kind” provisions, which accommodate the exchange of many different varieties of commercial investment properties.
In the simplest terms, a 1031 Exchange allows a taxpayer to defer the recognition of capital gains tax due from the sale of investment property by replacing the sold property with a "like-kind" property of the same or greater value. Section 1031 of the Internal Revenue Code originally applied to personal property as well as real estate, but was amended by the Tax Cuts and Jobs Act to remove exchanges of intangible and personal property. To successfully defer the capital gain, the taxpayer must use the profit from the sale to purchase a like-kind property within 180 days.
In the chaos of closing on a sale of your property, the last thing most people are thinking about is choosing a qualified intermediary, or “QI” (a.k.a., an exchange “accommodator” or “facilitator”). After all, aren’t they all the same? Aren’t all qualified intermediaries “qualified”? The answer is emphatically, no.
While Qualified Opportunity Funds (QOFs) and Qualified Opportunity Zone Businesses (QOZBs) are an essential part of the Opportunity Zone program, their purposes are quite different. QOFs are in place to fund projects in federally designated QOFs, while QOZBs are directly engaged in trade and activity within these locales.
Legacy planning can be essential to help manage the loss of assets from one generation to the next. Investigating strategies for generational wealth transfers is the first step in planning the protection of your wealth for future generations. If your goal is to protect your bequests, while simultaneously affording your heirs the freedom to manage their investment property according to their individual preferences, you need to plan. Planning now can provide your heirs with the flexibility to form their investment strategies while you can still offer guidance and simultaneously reap the advantage of avoiding unnecessary estate taxes. Since the term legacy planning implies the inclusion of value-driven elements, it is often considered to be broader than estate planning.
A Single-Tenant Triple-Net property (also known as “Net-Lease”, “STNL” or “NNN”) refers to a property which is 100 percent leased to one tenant with a lease structure in which the tenant is responsible for all property-related expenses, leaving the landlord with minimal responsibilities. NNN properties are a popular choice for individuals who wish to invest in real estate, but may not have the time or desire to actively manage a property.
The Opportunity Zone Program was created to direct much-needed capital to distressed areas by offering tax deferral incentives to investors. The program is finite with many deadlines: the statutory expiration of Qualified Opportunity Zones’ (QOZ) designations is December 31, 2028. Additionally, 2028 will be the first year during which early QOZ investments can be sold, allowing investors to qualify for their 10-year gain exclusion.
What is Investment Property Wealth Management?
