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What is a Disregarded Entity in a 1031 Exchange?
You have a variety of business entities from which to choose when it comes to initiating and completing a 1031 exchange. According to the IRS, individuals, C corps, S corps, general or limited partnerships, limited liability companies, and trusts – basically, any type of taxpaying entity – can set up to exchange investment properties under 1031 exchange rules.
What Happens if You Sell a Depreciated Rental Property?
You might have decided to invest in real estate for a few reasons. In some cases, rental property can be a hedge against inflation. That property could generate a steady cash flow for you. And, in some cases, that property might increase in value, giving you a potentially decent profit when you sell it.
Are Conservation Easement Payments Taxable?
Conservation easements are used to protect and preserve natural resources and open spaces. They involve a legal agreement between a landowner and a qualified organization, typically a land trust or government entity, which restricts certain uses of the land to ensure its long-term conservation.
What Is an Example of an Opportunity Zone?
Opportunity Zones are designated areas that are considered distressed and would benefit from economic growth and development. Created as part of the Tax Cuts and Jobs Act of 2017, these zones provide tax incentives for some parties who invest their capital gains into qualifying projects and businesses in the designated areas.
How to Revoke a Medical Power of Attorney
Power of Attorney (POA) is a legal term that means you are allowing someone else to act on your behalf. A person can employ several types of POAs, including a medical power of attorney, sometimes also called a healthcare proxy. With a medical power of attorney, the person making the designation (principal) names someone else (agent) to act on their behalf if the principal can no longer do so due to physical or mental incapacity.
Can Two Trusts Be Joint Tenants?
Joint tenancy is a standard structure for two or more parties to own property together. With a joint tenancy, each tenant has the same rights and responsibilities as the other owners and has an equal stake in the assets. In addition, with a joint tenancy, each co-owner has the right of survivorship. That means if one joint tenant dies, their share does not go to a designated heir. Instead, it is distributed equally to the remaining owners.
What is the Important 1031 Exchange Terminology to Know?
As we’ve mentioned in previous blogs, the 1031 exchange is a method to potentially defer capital gains taxes on the sale of real estate used for trade or investment. Through the process, you “swap” the real estate you currently own into other real estate of equal or greater value.
1031 Exchange 45-Day Rule Extension: How it Works and What to Consider
A 1031 Exchange has many rules, and getting any of them wrong can mean cancellation of the exchange. If that happens, the investor will get their money back, but it will come with a hefty tax bill since gains on the relinquished property are now taxable.
What is an Interest Rate Cap and How Does it Work?
For investors, interest rates can make a significant difference in whether a specific project is attractive or not. As interest rates rise, the margin for profit may shrink, requiring the investor to approach with caution. In some cases, a variable or adjustable interest rate can offer a tool to increase the deal’s feasibility. The reason for this boost is that the initial rate is lower than the investor can obtain for a long-term fixed-rate loan.
Buying a Rental Property in an Opportunity Zone: What You Need to Consider
The Opportunity Zone program can provide certain investment advantages. When conducted properly, buying a rental property in an opportunity zone can generate tax benefits, while assisting with economic revitalization. But if you’re interested in this particular action, here are five things to ask yourself.
