1031 Exchange & High Cash Flow Real Estate Investments
Tax savings from a 1031 exchange can be substantial. A 1031 exchange can be a great way to defer capital gains taxes, diversify your portfolio, and there’s a potential to grow your wealth through investment in high cash flow real estate. By doing a 1031 exchange, you can purchase replacement property, passive income potential, manage risk, and defer taxes.
What Are Triple Net Fees In A Lease?
Commercial property leases can take several forms. There are fundamental gross leases in which the tenant pays rent and usually utilities. Gross leases are most like residential rentals in that the owner bears the operating costs of the property. There are leases on the opposite end of the spectrum called absolute leases. The tenant assumes responsibility for virtually all property expenses, including real estate taxes, insurance, maintenance, and repairs. Large national clients generally undertake these. In between these extremes are the categories of net leases (single, double, and triple), which shift some operating expenses from the property owner to the tenant or tenants. Typically, a commercial real estate investor may look to one of the net lease options to reduce property oversight and enjoy stable and predictable cash flow. The net lease usually includes the following:
What Is The 1031 Plan, And What Do You Get?
A 1031 exchange is defined under section 1031 of the IRS code, and it’s a strategy used by taxpayers to defer capital gains taxes on a business or investment property. Upon the sale of the property, the taxpayer must find and purchase a “like-kind” replacement property with the profit gained from the sale of the relinquished property within a strict time period dictated by the IRS.
How Much Is Capital Gains Tax On Real Estate?
Are you thinking of selling your real estate investment property and worried about capital gains and tax consequences? When you sell your investment property at a profit, you’re liable to accurately report your capital gains to the IRS and to pay taxes on what you made from its sale.
What Is Depreciation Recapture And How Is It Calculated?
Real estate offers investors many different tax-advantaged strategies that can prove beneficial for limiting their annual tax obligations. Depreciation is one of the most valuable tools investors can use to reduce their federal tax liability by deducting or writing off a portion of their annual investment costs during the approved lifespan of commercial real estate assets.
Real Estate And Property Risk
Most investments come with some degree of risk. Generally speaking, the greater the risk, the higher the return requirements on your investment.
Do Tenants In Common Pay Inheritance Tax?
A common question from someone inheriting a property held by Tenants-In-Common (TIC) is if there is a need to pay inheritance tax.
How To Avoid Capital Gains Tax On Business Sale
Thinking about selling your business and worried about capital gains tax? There are several strategies that you can implement to potentially avoid or lower these taxes. Here are some options to keep in mind:
What Is Passive Income And How Do You Generate It?
Potential passive real estate income typically requires less effort and maintenance compared to direct real estate investments. Of course, you’ll want to stay on top of what’s going on with passive income sources and sponsors (if applicable). Designing a passive income plan isn’t a set-it-and-forget-it. But unlike earned income generated from a job (i.e., employee), passive income requires little involvement once it is set up.
Do Capital Gains Count As Income?
When a taxpayer sells an asset for more than its basis, it’s generally regarded as taxable income. This can be any asset - from a real estate investment property to your car or even your TV. These are considered capital gains, and taxpayers are responsible for accurately reporting this information to the IRS.
