What are the Benefits of an Installment Sale to the Seller?
Selling real estate at an appreciated value can generate a good-news, not-so-good-news scenario. The good news is that selling real estate at a higher amount than what you bought it for can mean profit. The not-so-good-news is that this profit – or capital gains – will be taxed, based on your specific tax bracket.
What is a Starker Exchange?
Like most tax topics, the 1031 exchange has a history of changes, primarily due to various legislative and judicial actions. The essential foundation of this tax-deferral strategy is that when investors reinvest the proceeds from selling an asset, they extend the original investment rather than taking their profit and transforming it into spendable cash. As a result, the IRS allowed investors to trade one property for another without paying the applicable capital gains tax.
What is the Federation of Exchange Accommodators (FEA)?
For real estate investors planning to use a 1031 exchange to defer capital gains and depreciation recapture taxes, it’s vital to follow the rules closely to avoid disqualification of the transaction. The 1031 exchange is a potentially valuable deferral tool, so the IRS expects full and transparent compliance with the regulations. Prominent among the requirements are the following:
What are the Different Kinds of Rental Property Loans?
Your path as a real estate investor may take various routes, depending on your resources and goals. Many people begin when they decide to change their primary residence. Instead of selling their current home when they acquire another, they may repurpose the initial residence into a rental property. Similarly, when your equity in a home increases, you may use that appreciation as a down payment on an investment property. Whether starting from scratch or with a saved down payment, you will probably need financing at some point.
What is the Main Purpose of Tenancy By the Entirety (TBE)?
Married couples and domestic partners have a choice among methods of structuring property agreements, depending on the state where they reside and their individual preferences. In most states, married couples can choose between joint tenancy or tenancy-in-common (TIC). This choice often extends to domestic partners as well. In nine states, married couples automatically own property as community property, and in about half of the states, Tenancy by Entirety (TBE) is also an available option. However, no community property states allow a TBE structure.
What is an Opportunity Zone Loan and How Do I Get One?
Congress created the Qualified Opportunity Zone (QOZ) program when it passed the 2017 Tax Cuts and Jobs Act (TCJA). The TCJA had several miscellaneous provisions, but the primary focus of Subchapter Z was the creation of the QOZ program. This new investment opportunity offers investors tax advantages for investing capital gains into economically challenged areas.
How Do I Report An Opportunity Zone on My Taxes?
Tax season is in full swing. This generally means investors have various questions about what needs to be reported—and how—to the IRS.
The Four Types of REITs
There are many different REIT structures, but we will cover four popular REIT types available to investors. Some you might not have heard of. The requirements to invest in these REITs span a wide range, meaning there’s something for everyone.
Who Cannot Use Installment Sales?
An installment sale can provide a useful tool to potentially defer taxes owed on the sale of capital assets. This is because, in most cases, taxes are owed on the actual funds received from the sale rather than the full amount. This assumes that the seller receives at least one payment after the tax year during which the sale occurs. It also requires the seller to fill out Form 6252 for each year of that payment.
Who Collects Capital Gains Tax?
When you make a profit on the sale of an asset, like stock, real estate or investments, you might be subject to capital gains tax. The capital gains tax is based on the amount of profit. The tax is collected by the federal or state government. The taxpayer is responsible for reporting the gain on their tax return and paying any tax owed.
