How Can You Calculate a Recognized Gain in a 1031 Exchange?
As we’ve mentioned in previous blogs, 1031 exchanges can come with many challenges. There are the in-stone deadlines, cost considerations, and paperwork, to name a few.
Capital Gains Treatments: Mutual Funds vs. DSTs
As an investor, you’re already familiar with capital gains and capital gains taxes. A capital gain is an increase in the value of a capital asset, which is generated when that asset sells. Meanwhile, capital gains taxes are the taxes you owe to the IRS from those realized capital gains from the asset sale.
What Happens to An Installment Sale at Death?
As we’ve mentioned in previous blogs, owning real estate as an investment can generate many benefits. And as we’ve also mentioned in previous blogs, selling appreciated real estate can trigger capital gains and depreciation recapture taxes. The sale could also lead to a higher income bracket, meaning more taxes.
Delaware Statutory Trusts (DSTs) And 1031 Exchange Requirements: What You Need to Know
26 U.S. Code § 1031 – known more commonly as the “1031 exchange” or “like-kind exchange,” allows investors to “swap” real estate holdings. When performed correctly, the 1031 exchange can help defer taxes on capital gains or depreciation recapture taxes. The requirement is that the relinquished and replacement properties must be used for investment or business purposes.
Selling 1031 Exchange Property: What You Need to Consider
Using a 1031 exchange to defer the payment of capital gains taxes on the sale of investment property is an attractive tool for many investors. Successful execution of the exchange will allow a taxpayer to defer paying taxes on the capital gain that an investment property has accrued. Naturally, the IRS is specific about what does and doesn't qualify for this favorable tax treatment. Taxpayers must judiciously adhere to the stipulations to reap the benefits.
How Can You Offset Passive Losses In Real Estate?
Ordinary income is taxed at some of the highest rates. This is income generated from a regular job. Wealthier clients often generate much of their income passively. However, some of it is still taxed at high ordinary income rates.
What Are The Differences Between Direct And Indirect Property Investments?
Investment strategies fall into two main categories: direct and indirect.
Is Step-Up In Basis Necessary?
When an heir inherits property at the owner's passing, a step-up in basis comes into play. Because of the step-up in basis, there are tax advantages for heirs. But do heirs have a choice, or can they elect out of a step-up in basis? Let's find out.
How Are Capital Gains Calculated On Sale Of Rental Property?
Understanding the calculation of capital gain when selling a rental property is crucial for smart financial planning. The first step in this calculation is to subtract the property's adjusted basis at the time of the sale from the total sales price. This must include any sales expenses such as legal fees and commissions. The resulting figure will be your capital gain on the sale. In order to provide a clear understanding of this process, we will explore this calculation using a hypothetical example in the following sections of our article.
Can I Buy a Property First and Then Do a 1031 Exchange?
Timing often plays an important role in the acquisition of commercial real estate, especially in competitive markets where properties may receive multiple bid offers from a pool of eager investors.
