The Realized Team’s Picks
Phantom Tax: What It Is And How It Works
Tax planning and management are already complex enough. Then comes the unexpected — phantom tax. This concept is something that not many companies and inventors anticipate, but it’s still a tax liability that you must address. Otherwise, you can suffer penalties and other unwanted consequences.
Triple Net Lease (NNN): What It Is And How It Works
Lease structures are essential in real estate investments. These contracts serve as the foundation for property agreements and can determine who pays for what, how each party manages costs, and how tenants or landlords handle long-term financial obligations. One lease structure that has become popular in recent years is the triple net lease agreement or NNN lease. You’ll typically find such arrangements in commercial properties, such as retail stores and office buildings.
How To Avoid Or Reduce Capital Gains Tax On A Home Sale
After selling a house, you may be feeling optimistic about the profit you’ve just made. There are many investment opportunities on the horizon, and you’re planning to use all of the home sale proceeds for promising prospects. Unfortunately, there is still one more thing that you’ll need to address before you can start investing: capital gains taxes.
DST Ownership Structure: Who Controls a Delaware Statutory Trust?
Delaware Statutory Trusts (or DSTs) have become popular, offering advantages like capital gains tax deferral and passive income. As such, more and more investors now want to learn about this investment vehicle’s relatively complex ownership structure.
What Is the Difference Between Single-Family & Multifamily Properties?
There are plenty of property types available for investors who want to build their portfolio with real estate investments. Two of the most popular categories of real estate are single-family and multifamily properties — residential structures that serve as living spaces for tenants.
1031 Exchange Boot: What It Is, How To Calculate, and Rules To Consider
The main benefit of a 1031 exchange is to defer taxes on capital gains. In theory, you should be able to delay payments on all the proceeds of a real estate asset sale, but there are cases when you may still incur tax liability. One specific scenario is the 1031 exchange boot — money or non-like-kind property you receive during a like-kind swap.
Capitalization Rate: What Cap Rate Is & How It Works
Real estate investing requires an understanding of various data and numbers to increase the chances of a successful venture. Among the many types of financial metrics, capitalization rate (or cap rate) is an important one. This value determines the rate of return for a given real estate investment. Understanding the cap rate is a factor that can help investors like you predict the profitability of the asset, among other useful applications.
Can You Do a 1031 Exchange Between States?
A frequently asked question connected to the 1031 exchange is, “Can you execute a 1031 exchange between states?” At the federal level, the answer is a definitive “yes.” Internal Revenue Code 26 U.S. Code § 1031 – “Exchange of Real Property Held for Productive Use or Investment” – falls under federal tax legislation. As such, the process is uniformly recognized across all 50 states and DC.
Can You 1031 Exchange a Second Home?
Second homes can be personal or investment property, and sometimes there is a fine line between the two. If you own a second home that you live in part of the year, and you bought it thinking the value would increase, but you don't rent it to others, it's most likely not an investment. If you have a second home in a popular vacation area and rent it to others most of the year, but you consistently spend a week there over the holidays, that is likely an investment property.
Can My S Corp Buy My House?
An S corp can be a valuable structure for a business, offering streamlined operations and some potential tax advantages. An S corporation has less than 100 shareholders and can be a sole proprietorship or a larger company. This entity does not pay federal income taxes at the corporate level but instead passes income or losses to shareholders to be reported on their returns. However, some states require S corporations to pay income taxes, including New York and California.
