How is Debt Treated in an UPREIT?
As a brief background: In a traditional REIT structure, the trust owns property directly or through limited partnerships. However, suppose an investor contributes real property to a REIT. In that case, the investor must recognize any increase in the value (fair market value over tax basis) that has occurred and would owe taxes on that amount.
Examining Sponsor Payments and Yield Manipulation Tactics
Delaware Statutory Trusts (DSTs) can offer many advantages to investors. One possible benefit of DSTs is they provide the opportunity to invest in quality real estate in smaller increments due to the fractional ownership structure.
Are You Having These Three Conversations About Real Estate With Your Advisory Clients?
Financial advisors rarely discuss the potential benefits of investing in real estate with their clients. The reason is twofold: outside of investing in publicly traded real estate investment trusts, real estate isn’t usually taught as part of the finance curriculum for registered investment advisors or certified financial planners; and financial professionals don’t have a compensation structure in place for clients who want to move money into commercial or residential real estate.
DST Due Diligence: What to Consider?
Although DSTs have been well received by investors as a viable replacement property option for 1031 exchanges, this type of investment should be more than a “plug-and-play” scenario. With the high velocity of deals and an ever-increasing number of sponsors looking to enter the market, due diligence is more important than ever to ensure you aren’t exposing yourself to unnecessary risk. In order to help you as an investor determine the good deals from the bad, this article addresses the integral questions you should always consider before investing in your next DST.
Ways to Help Your Clients Cash Out of Their Real Estate Investments
Property owners who are ready to cash out of their real estate investments have multiple options available to them, but each of those options comes with different tax implications.
Can a DST Be a REIT?
DSTs and REITs both manage property for investors, but there are differences between them. They have very different structures with different operating mandates. Maybe another question is why an investor would want their DST to become a REIT. This is actually a valid question. Let’s answer this question and dig into the differences between these two investment vehicles.
Do You Have to Recapture Depreciation in a 1031 Exchange?
Real estate investments can generate many benefits, not the least of which is property appreciation. This means that when you sell that appreciated property, you could realize a profit from that sale. One potential downside could be capital gains taxes. Another is depreciation recapture taxes.
5 Benefits of Including Real Estate in Client Investment Portfolios
Although the pandemic that shut down America back in 2020 is more or less in the rearview, its lingering effects continue to cast a long shadow across the national economy.
How To Form A Delaware Statutory Trust
The state of Delaware has been a preferred jurisdiction for business entities since the early 1900s. Today, nearly 70 percent of all Fortune 500 companies are incorporated in “The First State,” and in 2019, there were almost 1.5 million legal entities registered in Delaware.
How to Help Clients Defer Capital Gains on Their Investment Real Estate
Over the last few years, real estate properties have greatly appreciated. For any of your clients looking to sell, it can mean a nice profit. But with a nice profit comes a not-so-nice tax bill.
