Is Your 1031 Money Safe? Know Your Qualified Intermediary Risks.
The name “qualified intermediary” (QI) — or 1031 exchange accommodator — is somewhat of a misnomer. When I hear something is “qualified,” I tend to think that it has been limited, or is less-than-positive . But when it comes to a QI, most of the time this is not the case..
Tax Benefit Of Real Estate Investing - Examples
When properly structured, real estate can be an extremely tax efficient investment. Benefits are produced by the following three components: Depreciation Interest Deduction 1031 Exchange
Is a Reverse 1031 Exchange Right For You?
You find a property that you really want to purchase, but you know you have to move quickly to take advantage of the investment opportunity. The problem is you haven’t sold your existing property yet. A Reverse 1031 Exchange might be the answer and could save you thousands of dollars in capital gains taxes.
7 Things You Need to Know About 1031 Exchanges
Like-kind 1031 exchanges are widely used by real estate investors to create and preserve wealth. In simple terms, §1031 of the US tax code allows you to defer paying capital gains taxes, and what’s called "recapture" on the profits from selling a property, provided they are “exchanged” (i.e., reinvested) into another like-kind property.
Benefits Of 1031 DST And TIC 1031 Property Investments
Real estate investors contemplating a 1031 exchange must make many decisions. Perhaps the most important, but often ignored, is the replacement property they need to purchase in order to defer their capital gains taxes. Investors have just 45 days from the date they sell their property to find, evaluate and notify the IRS of the potential replacement properties. This is a daunting challenge for even the most experienced investors, particularly in markets where a 1031 investor has competition from other buyers.
What Are Fractional 1031 Replacement Properties?
When we here at Realized use the terms “fractional 1031 properties” or “fractional 1031 investments,” we are NOT referring to timeshares, shared vacation home arrangements or other “fractional interest” properties. For Realized, “fractional 1031 investments” refers to co-ownership in one or more properties by multiple 1031 exchange investors. Two ownership structures have been approved by the IRS for Fractional 1031 Investments, the Delaware Statutory Trusts (DST) and Tenants-in-Common (TIC). Realized coined the term Replacement Property Interests (RPI)™, which has the same meaning.
1031 Exchange Rules Explained
If you know anything about the IRS, it’s that they love making rules. Unfortunately for most of us, they don’t always make them easy to understand. A 1031 exchange is a major financial transaction for most investors, and given the consequences, one where you want to play by the rules. Let’s break down the key 1031 exchange rules in layman’s terms:
Replacement Property Options for 1031 Exchange Investors
As you may have already figured out, a 1031 exchange offers real estate investors a powerful tool to build wealth by deferring capital gains and depreciation recapture taxes when they sell an investment property. Investors accomplish this by reinvesting the proceeds from the sale of a property into another qualifying real estate investment.
Benefits and Risks of Investing in NNN Properties
A Single-Tenant Triple Net (NNN) property is an attractive investment option for a variety of investors. The NNN structure provides consistent income with minimal management obligations. In many NNN lease properties, the investor’s only responsibility is collecting their rent check! However, no investment is risk free, including NNN properties. If thinking about investing in a NNN property, investors should consider the following:
How Does A Mortgage Affect Real Estate Investor Returns
Commercial real estate is a relatively high dollar asset class, with even “small” properties costing hundreds of thousands of dollars. This is why investors almost always finance a portion of the purchase with a mortgage. Mortgages enables investors to acquire larger properties, but how else does it impact an investment? By way of example, let’s look at the impact of debt on the cash flow, principal reduction and appreciation of hypothetical investment properties.
