The Realized Team’s Picks
Indirect Real Estate Investments: The Upsides and Downsides
If you’re considering buying real estate for investment purposes, you might not like ownership responsibilities, including tenant issues, maintenance, market fluctuations, and taxes.
The Five-Year Rule and 1031 Exchange Impacts
In most cases, you can’t use a 1031 exchange to defer capital gains taxes and depreciation recapture on primary residence sales. Properties eligible for a like-kind exchange must be used for investment or business purposes; primary residents don’t fall under this category.
Mineral Rights and 1031 Exchanges
Section 1031 of the Internal Revenue Code allows you to sell investment real estate and put the proceeds into like-kind property that is of equal or greater value. Adherence to the IRS’ rules can mean deferring capital gains taxes and depreciation recapture.
1031 Exchange Basis: What it Is, How it Works
A 1031 exchange lets you exchange your investment real estate (relinquished property) for another of equal or greater value (replacement property). The main benefit of the exchange is that you could defer payment on capital gains taxes and depreciation recapture.
Absolute Net Lease: What It Is and How It Works
Acquiring and renting out an investment property means entering lease agreements with tenants. Those agreements range from gross leases (in which the tenant pays a fixed rent, and you pay all property operating costs) to a triple net lease (in which the tenant pays the fixed rent, plus insurance, taxes, and maintenance).
Steps to Set Up a Living Trust
If you own investment property, estate planning can be an important tool to manage your assets and ensure they reach your designated beneficiaries. One way to accomplish this is with a living trust.
Tax Implications of a Delaware Statutory Trust
Investment in a Delaware Statutory Trust (DST) could offer a few benefits:
Realized vs. Unrealized Gains: Differences and Tax Implications
Realized and unrealized gains represent profits from the sale of assets. However, that’s the only similarity between the two terms.
Important information to Know About Depreciation and Real Estate Sales
Real estate assets undergo wear and tear and other factors that can impact their useful life. This opens the door to depreciation, which can help reduce your tax liability while you own investment or business property.
How To Convert a Like-Kind Acquired Rental Property Into a Primary Residence
There may come a time when you want to turn an investment rental property acquired through a 1031 exchange into a primary residence. While the process is usually not complicated, converting real estate assets acquired through a like-kind exchange could pose several challenges. The IRS has strict rules regarding the use of such assets. Failure to comply could result in the loss of your tax-deferred status.
