The Realized Team’s Picks
Can a Distillery Be an Opportunity Zone Business?
Opportunity Zones, commonly referred to as Qualified Opportunity Zones or QOZs, were created by the 2017 Tax Cuts and Jobs Act. Formally known as the Investment in Opportunity Act, the relevant portion of the legislation was included in the TCJA to encourage investment of capital gains into specifically designated, economically challenged areas that could benefit from the infusion of funds. In return for directing their assets into the identified areas, taxpayers could receive tax deferrals and even breaks on their earned gains.
Do REITs Have a Limited Lifespan?
The term REIT (Real Estate Investment Trust) refers in a broad sense to a type of organization that owns or invests in real estate or financial instruments related to real estate. REITs come in several varieties, and the differences can cause some confusion. However, the basic structure and requirements are as follows:
How Much Do 1031 Exchange Companies Cost?
A 1031 exchange refers to Section 1031 of the Internal Revenue Code, which allows taxpayers to defer the recognition of capital gains taxes which would otherwise be due from selling investment property if the investor replaces the sold property with a “like-kind” asset of the same or higher value. At the outset, this exchange was a real-time event (and it was possible to transact using other assets in addition to real estate), but over time it has developed such that most exchanges transpire on a delayed basis. As a result, protocols need to be in place to ensure that the taxpayer doesn't control the proceeds from the sale of the property they are relinquishing during the time before the purchase of the replacement.
Are Charitable Donations Tax Deductible?
The short answer is yes; charitable donations to qualified organizations can be tax deductible. However, there are some stipulations and reporting requirements.
What Is a Residential REIT?
Real estate investors are often looking for ways to further diversify their portfolios. In the same way that investors who focus on publicly traded stocks don’t solely focus on one type of asset class, real estate investors often like to hold investments in varying types of real estate.
What Types of Risk Cannot Be Reduced by Portfolio Diversification?
Portfolio diversification is a basic tenant of any good risk management strategy. However, there are some risks that portfolio diversification can not improve on. It’s important to be aware of the limitations of portfolio diversification and the risks that a portfolio will face no matter how well diversified it is. This article will dig into the types of risk that can’t be reduced by portfolio diversification.
What Kind of Improvements Can Render a Property Ineligible for a 1031 Exchange?
In a 1031 exchange, capital gains taxes can sometimes be deferred when selling one investment property and using the funds from the sale to purchase a like-kind replacement property.
What are Qualified REIT Dividends?
A Real Estate Investment Trust (REIT) is a company that generally invests in real estate. These companies do not pay tax on their income, provided they distribute at least 90% of their profit to their shareholders as dividends. Depending on the type of REIT, this income is generated by rent payments, proceeds of the sale, and loan repayments.
Why Consider a Delaware Statutory Trust?
Real estate investors may be looking for ways to keep more money in their pockets at the end of the tax year. Obviously, there are some cases where taxes cannot be avoided, but there can be a legal way to write off some of your earnings or defer some of the taxes you owe until a later date. Obviously, it’s vital that any tax breaks you find are applied within the framework of the law, as failure to comply with state and federal tax laws can result in hefty fines and more serious penalties. However, knowing how to use tools, such as a Delaware Statutory Trust, can help you legally keep your money in your pocket.
What is a Qualified Purchaser?
A qualified purchaser is defined by the Securities and Exchange Commission (SEC) as an individual or family business with over $5 million in investments, not including a primary residence. A family business would not qualify if its sole function is to invest in a fund.
