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A single-family home is the most popular type of property in the United States. Currently over 44 million Americans live in a rented single-family home. Characteristics of a single-family home include:
A Delaware Statutory Trust (DST) is a 1031 exchange-eligible investment structure that gives investors partial ownership of commercial real estate properties that are managed by a professional real estate Sponsor. The DST market has been growing steadily over the years, from $3.4 billion in 2019 to $7.4 billion in 2021, according to Mountain Dell Consulting. As the market for these kinds of investments grows, product diversification is likely to follow suit.
Investors who prefer to defer their payment of capital gains taxes when selling an investment property are sometimes interested in the details of executing a 1031 Exchange. A properly transacted 1031 can allow the taxpayer to sell an asset and reinvest the proceeds in other investment property while deferring the tax on any gains. This tool can contribute to leveraging success and is repeatable, compounding the value.
When crafting and managing your investment portfolio, one of the fundamental goals is to maintain a diverse array of components. A varied selection of holdings is typically designed to seek growth and manage volatility. Most likely, you have some professional help to guide you in this journey, but you also probably influence the process in large and small ways and educate yourself on current thinking about investing.
Whether you are applying for funds to buy an investment property or considering tenants for a rental property you own, understanding default risk is an essential part of the process. Default risk is a concept that lenders and landlords use when determining whether to lend money or sign a contract with renters.
Depreciation is one of the best tax deductions for real estate investing. It’s a non-cash flow expense because it doesn’t affect an investor’s bank account but can reduce taxable income.
President Biden in April of 2021 proposed the removal of a key tax advantage for real estate called the step-up in basis for inherited property. Anyone who’s dealt with inherited property likely knows how important the step-up in basis can be for real estate that’s transferred to heirs upon the owner’s death.
The IRS taxes different types of income at different rates. For example, when it comes to some types of capital gains, they can be taxed at more favorable rates than ordinary income. However, not all capital gains are taxed equally, and rates vary widely.
Selling a rental property falls under different taxation rules than the sale of your primary home. When you sell a rental property, it is considered the sale of a business asset and is treated differently. You must report the sale to the IRS, and it is important to know what to report and where to report it.
A Delaware Statutory Trust (DST) may provide an alternative investment if you buy real estate properties to pursue passive income. Purchasing ownership in a DST can offer you income and the potential to bolster your investment portfolio.