What is a 401(a) Retirement Plan?
While most people are familiar with the 401(k) retirement plan provisions, many are not as aware of the nearby section of the Internal Revenue Code in 401(a). While the (k) retirement plans are typically sponsored by private companies, a 401(a) is generally established by a non-profit organization, a non-federal government agency, or an academic institution. Sometimes these organizations will set up a 403(b) plan instead of a 401(a). In either case, the sponsoring organization can determine the eligibility requirements and compel participation, but there are differences.
Important Factors To Know When Investing In Commercial Real Estate
Investing in commercial real estate can be profitable but many factors come into play. Commercial real estate is property that can generate income and capital appreciation for the owner and includes any non-residential real estate. Examples of commercial real estate include retail space, office buildings, industrial buildings, and multi-family properties, among others.
1031 Exchange Into Delaware Statutory Trust: What Terms Should I Know?
A Delaware Statutory Trust (DST) is one of the most common investment methods when considering a 1031 exchange. Although Delaware is in the name, you can complete a DST investment anywhere in the United States. Neither the investor nor the property needs to be in Delaware. A DST is a pre-packaged investment on a property put together by a sponsor. After the sponsor does due diligence, negotiates lease terms, and takes other steps to put the package together, then they offer equity to investors. The trustees pool their 1031 exchange funds for the investment and then receive cash distributions if the property is profitable.
Risk and Rewards: All-Cash Versus Financing
Consider the following scenario. You meet a friend for lunch, and he is very excited about a real estate purchase on which he just closed. He is now the proud owner of a fully tenanted apartment building, located in a great part of town. Then he delivers the piece de resistance. “I paid all cash for it!” he announces. “This investment is practically risk-free!”
Can Tenants In Common Force a Sale?
Tenant in common is a frequently used joint ownership agreement for commercial and residential real estate. Commercial real estate investors often purchase individual interests in TIC properties to complete 1031 exchanges and defer capital gains taxes on the sale of investment properties.
What is a Section 1231 Gain?
Selling a business or investment property is a big decision with many financial ramifications. Sure you’re likely to gain some profit, but you’re also likely to be hit with a significant tax liability on any gains realized from your assets.
Capital Gains Tax On Primary Residence: How Much Is It And Can It Be Avoided?
A primary residence is not an investment property and thus has different tax outcomes. Primary residence homeowners can take advantage of certain tax benefits when selling their home. This benefit is called section 121 primary residence tax exclusion.
Do Opportunity Zone Credits Impact Regular Stock Gains?
Much of the discussion concerning Qualified Opportunity Zones (QOZs) investments seems to involve real estate sales. Capital gains from those dispositions can be put toward a Qualified Opportunity Fund (QOF), which then reinvests those monies into a federally designated Opportunity Zone.
Capital Gains Tax On Second Home: How Much Is It And Can It Be Avoided?
When selling a second home or vacation home, the taxpayer will incur capital gains taxes on any gain. These taxes would be treated as long-term capital gains if the home was held for more than a year. Long-term capital gains have rates of 0%, 15%, and 20%, dependent on the taxpayer’s income.
Can Tenants In Common Have Unequal Shares?
A tenancy in common is a legal ownership structure that allows two or more people to jointly purchase and hold real estate. TIC properties offer several potential benefits for 1031 exchange investors seeking to defer capital gains from the sale of investment properties.
