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How to Report Delaware Statutory Trust (DST) Income
A Delaware Statutory Trust (DST) allows investors to put their money into a trust, which is then pooled with other investor funds. The trust then uses that money to invest in real estate. The trust’s real estate can generate income for the investors, also known as beneficiaries. That income must be reported to the IRS when tax time rolls around.
What is the 14-Day Rule for a 1031 Exchange?
To ensure a successful 1031 exchange, following the in-stone deadlines provided by the IRS is essential. These deadlines include the 45-day identification period and the 180-day exchange period.
What Happens to a Revocable Trust When a Grantor Dies?
Trusts are often created to help streamline the transition of assets from one person to another (or group) and avoid probate court. Dealing with a death is difficult enough, and probate court doesn’t make the process any easier.
Do Closing Costs Reduce Capital Gains?
When it comes to tax implications, closing costs can potentially play a role in reducing capital gains. By including your closing costs into the cost basis of your property when it's sold, you essentially increase the initial investment amount. The effect of this is that it reduces the total profit or 'capital gain' realized from the sale. As a result, the potential capital gains tax that you may owe to the IRS could be lessened. Here’s how it works.
Can Joint Tenants With Right of Survivorship be Contested?
When two or more people own real property together, and they want to ensure a smooth and legally airtight transfer of the property to the surviving owners in the event that one or more owners die, they deed the asset as a joint tenancy.
How Much of a Farm Loss is Tax Deductible?
Farm losses often go hand-in-hand with farm ownership. Figuring out how much of a farm loss is tax deductible can be as difficult as raising corn in Death Valley.
What Are The Advantages and Disadvantages of a 1031 Exchange?
Of all the tools in a real estate investor’s toolbox, none works quite like the 1031 exchange.
Tenants in Common Buyout Agreement: What You Need to Know
There are several different ways to title jointly owned real estate. A Tenancy in Common is a common legal agreement between two or more property owners.
Why Are Rental Losses Disallowed?
Real estate investors know that income-generating investment properties aren’t always in the black. Losses can be common on rental properties, especially in years where you have to fund capital expenditures for major repairs or upgrades to the property, or if you have extended periods where your property sits vacant.
Can You Rent To A Relative In A 1031 Exchange?
Can a property acquired in a 1031 exchange be rented to a family member? The answer, as per the tax court, is yes. However, to ensure that the transaction complies with IRS guidelines, certain key criteria must be met. Primarily, the rent set for the property should align with the fair market value appropriate to its location. Additionally, a formal, written rental agreement is necessary, and the exchanger must diligently enforce its terms, particularly those pertaining to the punctual payment of rent. With these steps, a 1031 exchange involving rental to a family member can be conducted successfully.
