Is a Grantor Letter the Same as a K-1?
A grantor letter and a Form 1065 Schedule K-1 are common records in taxation and financial documentation. While they have some similarities, they serve different purposes.
How to File Estate Taxes
When someone dies and transfers physical and monetary assets to their heirs, those assets may be subject to an estate tax. A vast majority of Americans won’t have to worry about paying estate taxes. The federal estate tax exemption in 2023 is $12.92 million, so unless you are leaving your heirs property, cash, stocks, and other assets with a fair market value greater than that amount, your heirs won’t have to worry about estate taxes.
Does a 1031 Exchange Need to be Completed in the Same Year?
Real estate investors who undertake 1031 exchanges in order to defer capital gains tax liabilities or diversify their real property holdings have six months from the closing date on their relinquished properties to complete their exchanges.
What Sources of Income are Subject to Double Taxation for Businesses?
Forming a business is usually a simple process that can be completed in a few minutes through your state’s Secretary of State website.
How to Calculate Cap Rate
If you’re involved with any kind of real estate investment or holdings, you’ve no doubt heard the term “capitalization rate,” or its shorter version of “cap rate.” Cap rates are used by real estate investors, owners, and others involved in the industry because it helps them understand the relationship between a property’s value, and the net operating income it generates. Let’s unpack these terms, and then learn about the cap rate formula.
Can You Borrow Against a 1031 Exchange Property?
One of the potential benefits of direct real estate ownership is the ability to “borrow” against it. This is known as a “cash-out refinance,” and it involves applying for a new loan to pay off the property’s current loan, while obtaining extra cash based on that property’s equity.
What Triggers Depreciation Recapture?
Investment property owners are likely quite familiar with depreciation, since it allows them to deduct certain costs associated with acquiring and improving income-producing real estate, which can lead to lower annual taxable income.
How to Help Your Clients Diversify Their Real Estate Holdings
Real estate diversification is about far more than choosing different locations and sectors to invest in. The topic is extremely deep. Location and sector-based investing are only skimming the surface. When discussing diversification with your clients, the following lists should be a minimum: Markets and Demographics Sectors Public vs. Private Deals Diversification Through Single Funds and Syndications Equity vs. Debt Deals Factoring In Economic and Demographic Projections
Do You Have to Pay Capital Gains on Livestock?
We’ve written plenty of articles about capital gains and capital gains taxes on the sale of real estate property. But one question that comes up frequently is whether sales of other property types can trigger capital gains taxes. When it comes to farming, for example, does a farmer who sells livestock have to pay taxes on the gain from that sale?
How Do You Calculate Gross Profit Using Installment Sales?
In previous blogs, we’ve discussed ways to defer capital gains taxes. A couple of examples are using the 1031 exchange or tax-loss harvesting.
