How to Defer Capital Gains After Exiting an Opportunity Zone
When you choose to invest in a Qualified Opportunity Zone (QOZ), there are several potential motivations. First, you may be seeking to defer the payment of taxes on capital gains earned on another investment. If that is one of the reasons, keep in mind that you must invest the eligible profit into a Qualified Opportunity Fund (QOF) within 180 days of the date that the gain would be recognized for federal income tax purposes.
What Is the History of Tenants-in-Common?
If you’re looking for a way to buy a piece of property with another person or people but don’t want to go to the trouble of forming an LLC, you can consider a Tenant-in-Common (TIC) structure.
Can I Purchase a Home While Renting a Property?
Buying an investment property is a way to diversify your wealth and seek a passive income. Many real estate investors own their primary residence and invest on the side to increase their asset portfolio. However, some investors live in a rental unit while simultaneously investing in rental properties.
Who Pays Net Income Investment Tax (NIIT)?
In a previous article, we discussed the concept of net investment income tax (NIIT). We outlined the fact that the 3.8% NIIT under the auspices of 26 U.S. Code § 1411 - “Imposition of Tax,” and is applied to net investment income (NII).
Can You Do a 1031 Exchange on Cryptocurrency?
The Internal Revenue Code has traditionally permitted investors to exchange real property used for business or held for investment purposes for other business or investment property of the same type and has referred to these swaps as “like-kind exchanges.” Thus, making such an exchange would not expose the taxpayer to taxes on any gain unless they received the increase as non-like property or in money.
Can Opportunity Zones Be Used for Equipment?
The Tax Cuts and Jobs Act of 2017 brought about many different kinds of tax reform, particularly for corporations and private investors.
What Is a Delayed Section 1031 Tax Exchange?
If you’ve been reading our blogs on a regular basis, you know all about the 1031 exchange. Sometimes called the “like-kind” exchange, Section 1031 of the Internal Revenue Code allows you to “exchange” a current property used for investment or business purposes (the “relinquished” property) into another property (the “replacement” property). Doing so means you can defer capital gains on the disposal of your relinquished property.
What Are Three Methods of Depreciation?
We’re going to review the three most popular depreciation methods. Selecting an efficient depreciation method can result in taxation that better aligns with a company’s ability to generate revenue. Of course, you’ll want to speak with your tax adviser before deciding on any of these methods.
Can You Take Cash Out of a 1031 Exchange?
The 1031 exchange isn’t all or nothing, meaning that 100% of the sales proceeds must be used in the exchange. However, it may come at a price. Boot in a 1031 exchange refers to the fair market value of cash, benefit, or other non “like-kind” property received by the taxpayer in an exchange of a capital asset, which is subject to capital gains tax.
What Is Leverage Risk?
Leverage allows investors to increase their exposure to a market, whether real estate, stocks, or commodities. If managed well, leverage can work in an investor’s favor. But some investors take on too much leverage. When the market goes against them, it amplifies the negative impact. In some extreme cases, an investor can be wiped out just from using too much leverage. Let’s see how leverage works and the risk it presents.
