The Realized Team’s Picks
Do Capital Gains Affect Medicare Premiums?
Selling an investment property in retirement might boost your income—but it could also lead to unexpectedly high Medicare premiums. If you’re not careful, your capital gains might trigger costly adjustments.
1031 Exchange Cash Out Refinance: Rules, Steps, and More
Many investors take advantage of 1031 exchanges due to how this strategy allows tax deferral and diversification of assets. The process allows the swap of two like-kind properties with no sale occurring, so there’s no taxable event. To prevent abuse, however, the IRS has set many strict rules for the 1031 exchange. One core tenet is the requirement to reinvest all the proceeds from the sale of the relinquished property into the replacement one to receive complete tax deferral.
1031 Exchange for Farmland: Rules, Tax Deferral, and Eligibility
Those looking to diversify their investment portfolios while deferring taxes can turn to 1031 exchanges, a viable and popular strategy. This approach allows you to exchange properties without incurring a sale, making you eligible to defer capital gains taxes. For farmland owners, this can be a valuable tax-saving strategy. However, specific 1031 exchange farmland rules apply. Not all aspects of a farm qualify, making such a transaction more complex than exchanging apartment complexes, for example.
Comparing 1031 Exchanges and Opportunity Zones
Deferring capital gain taxes is a widely used strategy that helps investors preserve their funds as they diversify into new sectors or niches. Among the many tax-deferral methods you can leverage, two of the most popular options are 1031 exchanges and Opportunity Zones.
1031 Exchange for Oil, Gas, Water, Mineral, and Ditch Rights
When we think of 1031 exchanges, we picture investors swapping one property for another. This is the most common scenario, but there are cases when the transactions are a little more unconventional. In fact, you can exchange oil, mineral, gas, water, and ditch rights through a 1031 exchange. Done correctly, such a practice can help you defer capital gains taxes as outlined by Section 1031 of the Revenue Code.
What Language Should Be Added to a Contract in a 1031 Exchange?
Entering a 1031 exchange is a good strategy that can help you preserve your capital while diversifying your investment portfolio. If you follow the rules set by the IRS, you can enjoy tax-deferral benefits that let you delay payments for capital gains taxes. There are, however, many 1013 exchange rules, including the proper contract language for the sale and purchase agreements.
The Pros and Cons of Using an Occupied Duplex in a 1031 Exchange
Acquiring a property through a 1031 exchange lets investors diversify their portfolio alongside some great tax deferral benefits. As an investor, you’ll naturally want an asset that matches your preferences and helps you achieve your financial goals. One popular option is an occupied duplex property, offering various benefits like immediate cash flow. Even so, there are some challenges to keep in mind to minimize issues.
How Do I Report a 1031 Exchange on My 1040?
Undergoing a 1031 exchange can be an advantageous investment strategy that lets you diversify your portfolio, grow your capital, and defer capital gains taxes for investors. To maintain your tax-deferred status, however, the IRS has set strict rules. These stipulations include proper reporting during tax filing. However, this step of the process can be complex.
What Is a Non-Safe Harbor 1031 Exchange?
Undergoing a 1031 exchange is a strategic move that allows you to defer capital gains taxes. The IRS has many stipulations regarding these transactions to prevent abuse, with safe harbor rules providing definitive language for full compliance. However, some investors still choose to complete a non-safe harbor 1031 exchange due to special circumstances.
How Long Does a 1031 Exchange Need To Be Rented?
A 1031 exchange allows you to enjoy tax-deferral benefits as you reinvest proceeds from a property sale into another like-kind asset. However, the IRS does require you to hold the acquired property for business or investment use. This rule can impede people who may want to convert their assets later, such as turning a rental property into their primary residence. In this blog post, Realized 1031 discusses how long a 1031 exchange needs to be rented to maintain your tax-deferred status and avoid IRS scrutiny.
