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How To Record A 1031 Exchange
Recording a 1031 exchange properly is crucial. This involves filling out IRS Form 8824 and submitting it with your federal income tax return. Each individual 1031 exchange you undertake within a tax year requires a separate Form 8824 to be accurately recorded. This form provides a detailed account of both the relinquished and acquired properties involved in the transaction. By diligently recording this information, you ensure the IRS knows the capital gains deferred through your 1031 exchange.
Can One Member Of An LLC Do A 1031 Exchange?
In the world of business ownership and property investments, there are several different structures and tools that you can use. For instance, you can own a business as a sole proprietor, you can have co-owners, and you can all be in business together as an LLC. In an LLC, you and the people you own the business with have a legal separation of your personal finances and the business’s finances. This ensures that you are not at risk of personal financial ruin if the business doesn’t work out as you planned.
What Is a 99-5 Transaction?
A “99-5” refers to IRS Revenue Ruling 99-5, which discusses the federal income tax consequences of a transaction that involves changing a single-member LLC (limited liability corporation) into a partnership for federal tax purposes.
What is a Distribution From a Retirement Plan?
A distribution from a retirement plan occurs when the account owner withdraws money from the retirement account. Depending on the retirement plan, the IRS can consider these distributions taxable income.
What Is a Section 1411 Adjustment and How Does it Work?
The income you make from passive investments on your trust or estate, minus any accrued expenses, is your Net Investment Income (NII). This number is added to your Adjusted Gross Income (AGI) and determines how you are taxed according to Section 1411 when tax season rolls around.
Can a Power of Attorney Change a Beneficiary?
Naming a power of attorney is the process of choosing someone to act on your behalf when you cannot do it yourself.
How Can I Calculate a REIT Dividend?
For many investors, yield drives their investment choices. With public real estate investment trusts (REITs), yield is expressed in the form of quarterly or annual dividends that are a percentage of the REIT's current share price on a major stock exchange.
What Documents Do I Need for Capital Gains Tax?
As you probably know, the IRS recently received a significant funding boost from the Inflation Reduction Act. The IRS is hoping to increase the audit rate from its current sub-one percent performance, focusing on higher-income tax returns. Examining higher income returns makes sense, as does investigating returns with income from sources that aren’t easily verified. For example, the IRS reports that for ordinary wages and salary income, compliance with reporting and paying income tax is nearly perfect. In contrast, for income from harder-to-verify sources like small businesses, noncompliance may be as high as 55 percent.
What Are the Penalties for Paying Property Taxes Late?
Real estate properties can be valid long-term investments, but they also come with some major expenses - most notably, property taxes. Depending on where you live, you’ll usually have to pay property taxes once or twice a year. But what happens if you pay your property taxes late?
