The Realized Team’s Picks
How Do Qualified Intermediaries Handle Earnest Money Deposits?
There are many stages in real estate transactions, and one that isn’t talked about as much but becomes an important discussion in 1031 exchanges: earnest money deposits. These are payments made to secure a property under contract, but they can add some confusion, especially with how direct control of proceeds isn’t allowed in a like-kind exchange. How do qualified intermediaries handle earnest money deposits?
1031 Exchanges: Understanding the Mechanics of Direct Deeding
A 1031 exchange is a strategy that allows investors to defer capital gains taxes by reinvesting the proceeds from the sale of one investment property into another like-kind property. By doing so, the transaction may avoid triggering an immediate taxable event, potentially extending the time capital remains invested.
How 1031 Exchanges Can Help Diversify Your Real Estate Portfolio
For many investors, 1031 exchanges are often used for tax deferral benefits. By exchanging like-kind properties, investors may defer recognition of capital gains, potentially allowing them to keep more capital invested. However, delayed tax payments aren’t the sole benefit of 1031 exchanges. Such transactions also offer real estate diversification. In this article, Realized 1031 explores how a 1031 exchange can be used as part of a broader diversification strategy.
How to Quantify and Integrate Real Estate Risk Into Portfolio Planning
Real estate has long been viewed as an inflation-resistant asset class, but like all investments, it carries risk, and sometimes in less obvious forms than equities or bonds. For advisors helping clients incorporate real estate into broader wealth strategies, understanding and quantifying these risks can be an important step in developing a more complete picture of the client’s overall financial situation.
Incorporating 1031 Exchanges Into Your Estate and Legacy Planning
Most investors think of wills, trusts, and beneficiary designations when it comes to estate planning. However, there are other tools at their disposal that can help with areas such as tax deferral and long-term planning. One of these is the 1031 exchange. This strategy is typically used for tax-deferral purposes, but it can also help during estate planning and settlement.
Can You Revert an UPREIT Structure Back to Direct Property Ownership?
Participating in an umbrella partnership real estate investment trust (UPREIT) can offer certain advantages, such as tax deferral and diversification. As you contribute your real estate assets in exchange for operating partnership (OP) units, you often benefit from reduced management responsibilities and regular income distributions. However, some investors may want to return to direct property ownership for a variety of reasons.
From Accumulation to Distribution: Transitioning Real Estate into Retirement Income
Investment real estate has long played a role in the wealth accumulation strategies for many high-net-worth individuals. It can provide income, potential appreciation, and a sense of tangible ownership.
How UPREIT Transactions Affect Your Estate’s Tax Liability
Estate planning often involves the complexities of passing your wealth to heirs. One challenging thing you may learn during this process is the existence of the estate tax. Some investors dedicate most of their later years to strategies that help manage this tax liability and ease the burden on heirs. One potential strategy is the umbrella partnership real estate investment trust (UPREIT).
How To Evaluate an UPREIT Sponsor Effectively
Investing in an umbrella partnership real estate investment trust (UPREIT) may be considered by some investors due to potential tax-deferral features and access to diversified real estate exposure. Like any type of investment, however, UPREITs will require thorough research to determine whether a particular offering aligns with your objectives. One aspect of due diligence is evaluating the UPREIT sponsor. The sponsor typically serves as the architect, manager, and long-term operator of the UPREIT, with responsibilities that can influence how the UPREIT is managed over time.
Can DSTs Replace Traditional Real Estate Ownership?
As you become a more experienced investor, you may encounter more advanced strategies and vehicles such as the Delaware Statutory Trust (DST). This vehicle may offer features that differ from those found in portfolios composed solely of directly owned real estate. This leads to the question: Can DSTs replace traditional real estate ownership? The answer is more complex than a simple yes or no. Below, Realized 1031 has shared an insightful article discussing the nuances. Keep reading to learn more.
