How to Pass Your Delaware Statutory Trust Interests to Your Heirs
For many investors, Delaware Statutory Trusts (DSTs) are a viable way to own real estate without the active management required for direct ownership. In addition, DSTs may provide income and tax advantages. One significant advantage to investing in DSTs is the investor’s ability to use a 1031 exchange to move from direct investment to fractional ownership of commercial property.
Can Anyone Invest in Opportunity Zones?
The Opportunity Zones Program has provided a way to direct billions of dollars of capital toward urban renewal and revitalization projects in designated Qualified Opportunity Zones. Those investing in Qualified Opportunity Funds (QOFs) can also benefit from certain tax advantages.
Who Takes Title In a 1031 Exchange?
In a typical 1031 exchange, an investor decides to sell a property and reinvest the proceeds. If the property has appreciated during the time the investor has owned it, they will be responsible for paying capital gains taxes on the increase in the fair market value. Assuming that the investor has held the asset for more than one year, the taxes will be assessed at the long-term capital gains rate, which is typically lower than the tax rate for ordinary income but can still be as much as 20 percent.
How to Evaluate a Delaware Statutory Trust Sponsor
Participating in a Delaware Statutory Trust (DST) is an attractive opportunity for some investors. For example, the investor might be interested in expanding their geographic reach, reducing their active management of property, or transitioning into a different commercial property sector. Each of these goals may be achievable by investing in one or more DSTs.
What are the Major Components of a Net Lease?
In commercial real estate landlords sometimes choose to use a net lease, which requires tenants to pay expenses beyond their rent to contribute to the property's operational costs. The components of a net lease can include base rent, property taxes, insurance, and maintenance costs.
Who Owns the Property in a Real Estate Syndication?
Real estate syndication is an investment strategy that allows individuals to pool their resources to invest in larger, more complex real estate projects than they could on their own. In a real estate syndication, investors typically form a special purpose entity (SPE), which holds title to the property and manages the investment for the parties involved.
What is a Qualified Escrow Account?
A qualified escrow account offers a secure and reliable way to hold and manage funds for a specific purpose while also providing protection for all parties involved. Investors often use this type of escrow account in a 1031 exchange to hold the funds from the proceeds of a sale until the purchase of a replacement property is complete.
Evaluating Non-Listed and Publicly Listed REITs: Assessing Volatility
Stocks can get very volatile, which can impact investors emotionally. This is understandable, as volatility can be difficult to deal with, even temporarily. However, we can never really know when volatility may end.
Is Installment Sale Income Subject to Net Investment Income Tax?
Higher earners, who meet certain thresholds, may be subject to the net investment income tax (NIIT). Those who have to pay the NIIT are slapped with a 3.8% tax on their net investment income or on the amount of modified adjusted gross income (MAGI) that exceeds the statutory threshold amount for your filing status. Basically, whichever of the two (investment income or MAGI) is the least amount will be subject to NIIT.
What Happens If You Sell a 1031 Exchange Property At a Loss?
If you’ve been reading our blogs on a regular basis, you know that we publish a great deal of information about 1031 exchanges and potential tax benefits. Specifically, a well-executed like-kind exchange can defer capital gain taxes and depreciation recapture to a future date.
