The Realized Team’s Picks
The Impact Of UPREITs On Real Estate Developers
In the past, real estate developers earned money by collecting rent on completed properties or selling them. In recent years, 26 U.S. Code § 721—“Nonrecognition of Gain or Loss Contribution”—has offered property owners and developers different real estate financing methods.
Can Real Estate Bootstrapping Be Used in a 1031 Exchange?
Real estate bootstrapping is generally associated with startup funding. However, bootstrapping could help drive a 1031 exchange, especially if you need extra liquidity to acquire a replacement property in exchange for a relinquished one. Bootstrapping might help you complete an exchange without adding the complexity of loans or outside investors.
How Long Do Triple Net Leases (NNN) Last?
Triple-net leased (NNN) properties can be suitable investments if you’re looking for real estate that offers potentially stable cash flow and minimal management. This is because a triple net tenant is responsible for property taxes, insurance costs, maintenance expenses, and rent.
What Contractual Language Should Be Added For a 1031 Exchange Purchase and Sales?
A 1031 exchange allows you to reinvest proceeds from the sale of investment real estate into another like-kind real estate property of equal or greater value. When performed correctly, the exchange can help you defer capital gains taxes and depreciation capture on the sale.
The Tax Benefits of Combining UPREITs and Estate Planning
If you’re contemplating retirement or want to transfer your wealth to future generations, estate planning is integral to your long-term strategy. And if investment real estate is part of that wealth generation, contributing your property to an Umbrella Partnership Real Estate Investment Trust or UPREIT can help you achieve current investment objectives while passing along potential tax advantages to your heirs.
What Are The Disadvantages Of Triple Net Lease (NNN) Investments?
Triple net lease (NNN) properties can be an attractive addition to your real estate investment portfolio. Because the tenant pays for property taxes, insurance, and maintenance under an NNN agreement, this real estate can generate steady income streams without headaches related to property management.
Understanding the Advantages and Drawbacks of a Tax-Deferred Exchange
A 1031 exchange can be helpful if you’re a real estate investor. When conducted properly, the process helps defer capital gains taxes and depreciation recapture on the sale of investment or business-use real estate. This can mean more immediate liquidity for the potential for long-term wealth creation.
What Isn’t Eligible for a 1031 Exchange?
26 U.S. Code § 1031—“Exchange of Real Property Held for Productive Use or Investment”—can help delay capital gains tax payments from selling your real estate. The 1031 exchange, also called the “like-kind” exchange, lets you invest those gains into other real estate of greater or equal value.
Do You Have To Pay Capital Gains Tax Immediately?
Capital gains occur when you sell your investment real estate at a price over what you paid. While generating profit from asset sales is great, you must also pay taxes on any recognized gain. You don’t have to pay taxes immediately—generally, you’ll pay when you file your annual tax return for the year you sell your property.
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.
