Can Opportunity Zones Be Both Residential and Commercial Properties?
Opportunity zones were developed to bring economic prosperity to distressed areas by giving potential tax incentives for investments in residential and commercial properties. The Qualified Opportunity Zones (QOZs) define areas where investors can see potential federal tax incentives by deferring or reducing the liability of capital gains taxes realized on their investment. The program was established in 2017 in the Tax Cuts and Job Act.
Can Opportunity Zone Investments Be Used for Housing?
While you mainly hear about opportunity zone investments for businesses, some investors wonder if they can use investments in Qualified Opportunity Zones (QOZs) for housing. The answer, with stipulations, is yes, but the housing must meet specific requirements to qualify. Opportunity zones were established in 2017 under the Tax Cuts and Jobs Act to boost the real estate in certain areas of the United States. Investors can purchase real estate in these designated zones through Qualified Opportunity Funds (QOFs). Investments can be for many types of real estate including commercial, multi-family, or single-family housing, under certain conditions.
How Long Do I Have to Do a Reverse 1031 Exchange?
A reverse 1031 exchange differs from a standard 1031 exchange in that you can purchase a replacement property before relinquishing your original asset. There is a set amount of time for both identifying the original asset to be sold and to close the sale.
Is a Delaware Statutory Trust (DST) a Grantor Trust?
A properly structured DST (a legal entity formed under Delaware law, although not necessarily physically in Delaware) will be a grantor trust for the purpose of federal income taxes. That means that participants in such a trust will have undivided fractional interests in the property held by the DST. A grantor trust is one in which the trust creator is considered the owner for income tax and estate taxes.
Should I Pay Off My Rental Property?
Should you ever pay off the mortgage on your rental property early? That’s a complicated question. And, as with anything else in investing, the answer depends on a number of factors, like your reasons for investing in real estate and your long-term goals. If you’re in the game to grow your net worth, for example, your perspective will likely be very different from someone who’s in need of cash flow. If paying down the mortgage on a rental property is a decision you’ve been pondering, it likely means that you’ve come into enough liquidity to make it happen. But is eliminating a mortgage the wisest use of that windfall? Here’s a look at when it might be smart to pay off a rental property, and when it might not.
Can You Do a 1031 Exchange From a Commercial to Residential Property?
A 1031 exchange can provide some meaningful tax benefits, which is why they are so popular among real estate investors. One rule of a 1031 is that the investor must exchange for like-kind property. If you own an apartment building, does that mean you must exchange for another apartment building? Or, is it possible to go from commercial property to residential?
Tenant in Common (TIC) Problems & Disputes - What You Need to Know
A Tenant-In-Common or TIC ownership structure is one in which a group of investors co-own property. Despite the name, the investors are not the tenants; the properties are leased to tenants. The TIC structure has specific rules, including these:
Can Municipalities Use Opportunity Zone Funds?
As part of the 2017 Tax Cuts and Jobs Act, Congress created the Investment in Opportunity Act, better known as the Opportunity Zone program. This legislation allows taxpayers to defer paying taxes on capital gains by reinvesting the gains into specifically designated areas known as Qualified Opportunity Zones.
Can You Do a 203K Loan for an Investment Property?
An FHA section 203(k) loan enables you to either buy or refinance a home and use the mortgage proceeds to make needed repairs. However, you can only use 203(k) funds for your primary residence. Still, since the Federal Housing Administration insures the products, they may be more accessible to some consumers with credit or income limitations than other rehabilitation loan options.
Who Can Be the Beneficiary for a DST, and Can There Be More Than One?
A DST, or Delaware Statutory Trust, is a financial investment that can provide individuals with undivided fractional ownership of commercial real estate properties, potential tax-advantaged income, and the ability to complete 1031 exchanges for entry and exit. That's a lot of potential in one investment option, and as a result, these instruments are complex. Like all investments, DSTs have risks.
