Jacob’s Recent Posts

What Qualifies for a 1033 Exchange?

Ben Franklin famously wrote that, “in this world, nothing is certain except death and taxes.”  While not a certainty, it can be expected that something bad will happen in a part of the country in which you live or hold investment real estate. Tornados, mudslides, floods, wildfires, hurricanes, and other natural disasters have become common seasonal events. 

Jan 30, 2023

How Does Depreciation Work When You Sell a Rental Property?

There are many costs involved when selling a rental property. One of those is related to depreciation. Where depreciation giveth, it also taketh away. The IRS will claw back some of the depreciation expense taken during the holding period. This isn’t just a simple number. Some calculations are involved in determining the amount of depreciation that investors must pay back at the time of sale.

Jan 26, 2023

What is the Difference Between Raw Land and Vacant Land?

People with longtime roots in one place may often drive by a new subdivision or retail strip center and wish they’d had the foresight to purchase that particular piece of land 20 years ago when it was still located far from their hometown’s urban core.  Buying land can be a risky investment – especially raw land that’s located well outside of currently developed areas. Let’s take a closer look at the differences between raw and vacant land and some important considerations that come with both types of investments. 

Jan 22, 2023

Can an LLC Member Serve as a Qualified Intermediary?

Real estate investors who complete like-kind exchanges to defer capital gains taxes on the sale of highly appreciated assets have to follow a stringent set of rules set forth by the Internal Revenue Service. Foremost among those regulations is the use of a Qualified Intermediary (QI) to facilitate all aspects of the 1031 exchange. 

Jan 17, 2023

What Is A Grantor Retained Annuity Trust (GRAT)?

A Grantor Retained Annuity Trust (GRAT) is when a grantor wants to transfer the appreciation of an asset to an heir(s) while also reducing the value of the asset that might be subject to estate or gift taxes. It is generally used by individuals as a possible tax shelter for a high-value asset(s) they want to pass to a beneficiary. 

Jan 13, 2023

Where Do I Put Royalties On My Tax Return?

Taxes are a regular part of generating income. No matter how you earn money, there’s a tax for that.  Taxes on ordinary income or capital gains are fairly straightforward. But taxes you might owe on royalties are a little more complex. This is because royalties encompass a broad list of payment types and income. In other words, where to report your royalties when tax time rolls around greatly depends on the type of royalties you earn. 

Jan 8, 2023

What are the Two Kinds of Boot in a 1031 Exchange?

Real estate investors have used 1031 exchanges for decades to defer capital gains tax liabilities generated from the sale of investment properties. 

Jan 3, 2023

Can I Deduct Remodeling Expenses for a Rental Property?

Owners of rental properties have many different tax deductions available that can help offset their rental income and potentially lower their annual tax liability. 

Dec 29, 2022

What is the Capital Gains Tax Rate on Collectibles?

When discussing investments and capital gains, the focus is typically on traditional investments (bonds, cash, and stocks) or alternative investments (real estate, hedge funds, commodities, or private equities). 

Dec 25, 2022

Can a Title Company Be a Qualified Intermediary?

The potential benefits of employing a 1031 exchange in your investment strategy are attractive. However, as with many appealing tools, investors should be careful and precise in using this one. Since structuring a real estate transaction using the exchange offers the opportunity to defer capital gains taxes, the IRS requires that taxpayers follow the rules precisely.

Dec 21, 2022

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