What Is Section 121 Home Sale Exclusion & How Does It Work?
When it comes to managing real estate wealth, tax efficiency matters. Most investment property owners are familiar with the 1031 Exchange as a way to defer taxes on commercial or rental properties. But if you’ve ever converted a rental into a primary residence — or vice versa — it’s worth understanding another key tax provision: Section 121 of the Internal Revenue Code, often called the Home Sale Exclusion.
Can a Real Estate Broker Sell a Delaware Statutory Trust (DST)?
A Delaware Statutory Trust (DST) is an investment vehicle that may be used as replacement property in a 1031 exchange to defer capital gains taxes and potentially enjoy passive income. DSTs are typically structured as private placement securities and are available only to accredited investors.
Why Use a Delaware Statutory Trust (DST)?
Among the many alternative investment options available today, Delaware Statutory Trusts or DSTs have gained popularity because of benefits like minimal investor involvement and truly passive income. When combined with 1031 Exchanges, DSTs also provide tax-deferral benefits that help investors preserve their capital. Even so, there are still those who are unsure regarding DSTs and their benefits, especially when traditional 1031 Exchanges are also a viable option.
Who Sets Up and Sells Delaware Statutory Trusts (DSTs)?
Among various tax deferral strategies available to investors today, Delaware Statutory Trusts (DSTs) remain a popular choice. When used with 1031 exchanges, DSTs allow you to defer capital gains taxes and enjoy not having to deal with day-to-day operations. Those who intend to employ this strategy should be knowledgeable about the DST to determine if it’s a strategy that aligns with their goals.
What Is the Holding Period for a Delaware Statutory Trust (DST)?
When you join a Delaware Statutory Trust (DST), there are certain features that you should take into consideration, such as the DST holding period, which is the length of time you’re expected to keep your investment in the trust before the underlying property is sold.
What Invalidates a 1031 Exchange?
A 1031 Exchange is one of the most powerful strategies available to investment property owners because it allows for the deferral of capital gains taxes when selling and reinvesting in like-kind property. However, the exchange must follow strict IRS rules to keep those tax benefits intact.
How To Find a Buyer for Commercial Real Estate Property
Selling commercial real estate is often more complex than selling a residential property. From navigating investment expectations to meeting sophisticated buyer criteria, it takes more than simply putting a listing on the market. Successfully finding qualified buyers for commercial real estate involves strategic preparation, proactive outreach, financial transparency, and sometimes creative deal structuring — especially when tax efficiency, like a 1031 Exchange, is part of the equation.
Is a Delaware Statutory Trust Revocable?
Investing in a Delaware Statutory Trust (DST) can be an appealing strategy for many investors because of potential benefits like passive income and diversification. There may also be tax-deferral benefits if you enter the DST through a 1031 exchange. However, the structure of this “trust” may make it confusing, especially in the context of estate planning. In particular, many investors wonder if DSTs are revocable.
Can You Deduct 1031 Exchange Expenses?
A 1031 Exchange offers investment property owners a valuable opportunity to defer capital gains taxes by reinvesting sale proceeds into like-kind replacement property.
Do Short-Term Capital Gains Count Towards Adjusted Gross Income (AGI)?
Understanding the tax consequences is an important factor when selling investment properties or other appreciated assets. One common question we hear at Realized® is: Do short-term capital gains count towards Adjusted Gross Income (AGI)?
