1031 Exchange Investment Timeline and Tax Implications
For investors intent on benefitting from the substantial advantages available through strategic employment of Section 1031 of the Internal Revenue Code, timing is critical. The foundation of the 1031 exchange is the concept that when an investor uses the proceeds of a property sale to purchase another property, the investor is, in effect, continuing the investment. Because the taxpayer is reinvesting all the profits, the IRS doesn't require payment of taxes on cash the taxpayer didn't receive. The investor should be aware that the tax is deferred, not eradicated. That means that if the taxpayer later sells a property without exchanging it for another qualified “like-kind” investment as a replacement, they will owe taxes on the accumulated gains.
Is TSP a Qualified Retirement Plan?
The Thrift Savings Plan (TSP), part of the Federal Employees’ Retirement System, is a defined contribution plan that closely resembles the private sector 401(k) and Roth IRA plans. It is not only a qualified plan, but it is also a part of the federal retirement system that can travel with federal employees who move into the private sector (or a different level of government) before they retire. The Federal Employees Retirement System (FERS) has three components: Social Security, to which both the employee and the employer must contribute, the Basic Benefit Plan, for which the employee also pays via payroll deduction and is partly funded by the employer as well, and the TSP. Both Social Security and TSP contributions can accompany you to another employer if you leave federal service before you retire.
How Does Financial Structure Impact A Real Estate Investment?
The financial structure (or capital structure) of a company is a combination of debt and equity used to finance business operations and growth. The levels of debt and equity can influence a company’s cash flow and potential risk exposure.
What is a 401K Retirement Plan?
A 401K is a retirement plan offered by employers to their employees. Employee contributions fund a 401K. Contributions are tax-free and come directly out of the employee's paycheck. 401K plan features vary widely across employers. This means a range of fees, investment offerings, employer match, vesting periods, and more. In this article, we'll explore the ins and outs of 401K retirement plans.
Can I Take Money Out Of My Retirement Plan?
One question that people ask from time to time, for various reasons, is whether they can withdraw money from their retirement plan. Usually, the inquiry is regarding a defined contribution, tax-deferred savings plan, like a 401(k) or a 403(b) program offered through an employer. Still, you might also ask about an IRA you established independently. While the answer to the query is generally "yes," a better question might be: "should I take money out of my retirement plan?" and that answer might be no.
How Do I Make The Most Of My Real Estate Assets?
For many investors, the attraction of real estate includes the ability to pursue diversification of your portfolio, and seek wealth accumulation, deferral or avoidance of taxes, and cash flow. As you seek to accomplish these goals, you can advance your progress with planning. As with any collection, whether in investments or art, ongoing curation is a best practice. Clearly stating your objectives is an essential step toward achieving them, and the next step is identifying and implementing some key tactical procedures to move in that direction.
1031 Exchange On A Primary Residence
The basics of the 26 U.S. Code §1031 “Exchange of Real Property Held for Productive Use or Investment” are that you can exchange any real property “held for productive use in a trade or business” into another such real property, and defer capital gains taxes on that exchange.
Is a Roth IRA a Qualified Retirement Plan?
Qualified retirement plans are recognized by the IRS and meet requirements laid out in Section 401(a) of the U.S. tax code and ERISA guidelines. Most plans offered through your employer are qualified retirement plans and qualify for tax breaks. A Roth IRA is not a qualified retirement plan, but there are similar tax advantages for those planning for retirement.
Real Estate Tax Strategy for the Family Office
Very affluent families may establish a family office to manage their wealth. These entities usually serve family units with tremendous assets and complex needs. In addition to investment advice, the family office may provide tax and estate planning services and personal support in other areas. Historically, most family offices were not registered as investment advisers due to their private status. After the Dodd-Frank Wall Street Reform and Consumer Protection Act eliminated the exemption for private advisers, the Securities and Exchange Commission adopted a rule that defined family offices and excluded them from regulation under the Investment Advisers Act of 1940.
How Many Opportunity Zones Are There?
We’ve learned a great deal about Qualified Opportunity Zones ever since the initiative was passed as part of the Tax Cuts and Job Act (TCJA) of 2017.
