The Realized Team’s Picks
What is the Difference Between a Will and a Trust?
Defining a Will: A will, also known as the last testament, is a legal document that enforces how a person’s assets will be allocated after their death. A will serves more functions than just distributing the assets of a deceased person. In fact, a will is a crucial component of estate planning.
Can Local Governments Modify Opportunity Zones?
The Opportunity Zone program was passed in 2017, as part of the Tax Cuts and Jobs Act. On the federal level, the program has allowed the investment of capital gains from the sale of assets into Qualified Opportunity Funds, or QOFs. These funds, in turn, push the monies toward specific, lower-income areas throughout the United States.
What Does ‘1031 Exchange Sale Condition’ Mean?
Real estate investors who have the ability to keep investment capital in an illiquid state often complete 1031 exchanges in order to defer capital gains taxes on the sale of real property assets.
Can You Transfer Your Opportunity Zone Into a Trust?
What is an Opportunity Zone Investment? Qualified Opportunity Zone investments and Qualified Opportunity Funds were created by the Tax Cuts and Jobs act in 2017. The legislation created an incentive for investors to reinvest capital gains into designated areas known as Qualified Opportunity Zones (QOZs). By supporting these economically disadvantaged localities, the investors benefit from the chance to defer and reduce the obligation to pay taxes on the capital gain.
What Is a Three-Party Exchange?
The 1031 exchange often comes with two big challenges: following the timeframes and finding the “goldilocks property.” An exchange typically refers to a trade between two parties, but this isn’t always feasible.
Delaware Statutory Trusts (DSTs) and Opportunity Zones
What Are Capital Gains Taxes? Taxpayers pay taxes on their capital gains, which is the difference between what an investor pays to acquire an asset (often referred to as the basis) and the amount received when the investor sells the asset. An asset is anything of value that you can exchange for cash, including stocks, gold, and real estate, which are tangible assets, and intangible assets like patents and intellectual property. If the investor owns the asset for less than one year, this is considered short-term, and the gain is taxable at the same rate as ordinary income. If the investor has owned (held) the asset for one year or longer, the ownership is long-term, and the tax rate is lower.
Can You Get Opportunity Zones Amended?
Qualified Opportunity Zones (QOZs) were established in the Tax Cuts and Jobs Act of 2017. The actual zones were determined in 2018. Opportunity zones cannot be amended at this time. The tracts were developed to give potential tax incentives to new investors in low-income and distressed areas and promote long-term investments and economic growth.
When Can a Vacation Home Qualify for a 1031 Exchange?
A 1031 exchange is when capital gains taxes might be deferred when used to purchase a like-kind property used for business, trade, or an investment. However, there are a few situations when you might be able to relinquish or purchase a vacation home in a 1031 exchange.
Can Opportunity Zones Be Both Residential and Commercial Properties?
Opportunity zones were developed to bring economic prosperity to distressed areas by giving potential tax incentives for investments in residential and commercial properties. The Qualified Opportunity Zones (QOZs) define areas where investors can see potential federal tax incentives by deferring or reducing the liability of capital gains taxes realized on their investment. The program was established in 2017 in the Tax Cuts and Job Act.
Can Opportunity Zone Investments Be Used for Housing?
While you mainly hear about opportunity zone investments for businesses, some investors wonder if they can use investments in Qualified Opportunity Zones (QOZs) for housing. The answer, with stipulations, is yes, but the housing must meet specific requirements to qualify. Opportunity zones were established in 2017 under the Tax Cuts and Jobs Act to boost the real estate in certain areas of the United States. Investors can purchase real estate in these designated zones through Qualified Opportunity Funds (QOFs). Investments can be for many types of real estate including commercial, multi-family, or single-family housing, under certain conditions.
