The Realized Team’s Picks
UPREITS, Real Estate, and Natural Disasters
Natural disasters are in the news. Hurricane-generated massive floods destroyed inland towns, while snow and ice storms wreaked havoc on Sun Belt states. At the same time, wildfires in Los Angeles have meant billions in losses.
What Are the Pros and Cons of a 721 Exchange?
Real estate investors have various options when deferring capital gains taxes and depreciation recapture on investment property sales. One such method is a 721 exchange, or Umbrella Partnership Real Estate Investment Trust (UPREIT). When used correctly, the UPREIT process can help defer tax liability from property that appreciates.
Reverse 1031 Exchange Lender: Understanding Their Role In Real Estate Transactions
The 1031 exchange is a tax deferral strategy enabling real estate investors to defer capital gains tax and depreciation recapture payments. A like-kind exchange comes in various formats, including a reverse 1031 exchange. If you’re contemplating a reverse exchange, you might need financial assistance. As such, a reverse 1031 exchange lender may be important for the success of your transaction.
How a 1031 Exchange Works With Crowdfunding
You might be a real estate investor interested in using a 1031 Exchange to potentially defer capital gains taxes and depreciation recapture on property you want to sell. You might find a replacement property that meets your investment parameters through a crowdfunding platform.
Can You Do A 1031 Exchange On A Short-Term Capital Gain?
The 26 U.S. Code § 1031—“Exchange of Real Property Held for Productive Use or Investment”—can help defer payment on taxes generated from your real estate sale. As long as you stay with the IRS’ guidelines and direct the gains of that sale into a like-kind replacement property, you can postpone payment of capital gains and depreciation recapture taxes.
Can You Exchange Property for Life Insurance?
A 1031 exchange can be a viable strategy for deferring capital gains taxes when you sell your real estate used for trade or investment and use the proceeds to purchase a like-kind property. When conducted correctly, the like-kind exchange process can help build wealth and diversify your real estate holdings.
Fannie Mae Requirements for a 1031 Exchange
The Federal National Mortgage Association—better known as “Fannie Mae”—is a government-sponsored entity (GSE) that supports the U.S. housing market by purchasing mortgages from lenders. This process provides liquidity and enables lenders to offer more loans to borrowers. One of the main benefits of working with Fannie Mae-backed loans for your investment property includes flexible down payments.
Knowing the Limitations of a 1031 Exchange
A successful 1031 exchange can be a powerful tool to help you defer capital gains and depreciation recapture taxes from the sale of property used for investment or business purposes. However, there are limitations to the process.
Understanding Different Like-Kind Exchange Processes
The 1031 exchange can be an effective tax-advantaged tool for selling investment real estate, buying more, and potentially deferring taxes on capital gains and depreciation recapture. But there is more than one way to execute—and complete—a like-kind exchange.
Understanding the 1031 Exchange Debt Rules
An effective 1031 exchange means you could defer paying taxes on capital gains and depreciation recapture on the sale of investment property used for business or investment purposes. The key to success involves understanding and following multiple regulations, including those involving debt.
