What is a Capital Loss and How Does it Work?
We frequently talk about capital gains, including the definition of short- and long-term gains, tax implications, and management strategies. We don’t discuss capital losses as often because no one wants to talk about losing money or value, right? Still, capital losses are part of reality when you invest, and understanding how they work can be helpful in seeking to manage your overall portfolio.
Does a Spouse Automatically Have Medical Power of Attorney?
In most circumstances, a spouse is not automatically designated as the medical or healthcare power of attorney (POA) for their incapacitated partner. The lack of a formal designation can lead to conflict and confusion during a medical emergency. Every state (and the District of Columbia) has established procedures for naming a healthcare proxy, which may also be called a durable power of attorney for healthcare. In most cases, a proxy recorded in one state will be recognized in another state, although there are exceptions.
When Do Opportunity Zones Expire?
When it comes to opportunity zone (OZ) investments, some investment deadlines have already passed, but there is still a basis step-up deadline that hasn’t passed, providing investors with some time to take advantage of this tax benefit.
Is Rental Income Taxed as Ordinary Income?
The short answer to whether rental income is taxed at the level of ordinary income (as opposed to the lower capital gains level) is yes, but...
Is a 1031 Exchange an Arm's Length Transaction?
The Dictionary of Real Estate Appraisal defines an arm's length sale as "A transaction between unrelated parties who are each acting in his or her own best interest.” If there is a business or personal relationship between the seller and buyer, the transaction is not considered to take place "at arm's length." Instead, this sale is an example of a related party transaction.
Can You Have Deferred Tax Assets and Liabilities?
Let's say you sold an asset for a profit. Or you've earned revenue in exchange for goods or services. In both cases (and other similar cases in which you've earned money), you're supposed to pay taxes on those gains.
What is a Springing Power of Attorney?
Designating a Power of Attorney (POA) can be an essential and productive tool for managing your financial and other interests. However, the term also causes confusion, partly because there are different varieties of POAs and partly because various jurisdictions use different definitions and procedures.
Simple Guide to Choosing a 1031 Qualified Intermediary
7 Questions to Ask Before Choosing a 1031 Accommodator... In the chaos of closing on a sale of your property, the last thing most people are thinking about is choosing a qualified intermediary, or “QI” (a.k.a., an exchange “accommodator” or “facilitator”). After all, aren’t they all the same? Aren’t all qualified intermediaries “qualified”? The answer is emphatically, no.
What is Real Estate Wholesaling, and How Does it Work?
Real estate wholesaling is not new, but it seems to be increasingly popular. The recent increase in wholesalers may be due to the emergence of some more prominent players in a traditionally fragmented field. Wholesaling involves a person or company acting as a middleman between a seller and a buyer, usually without using their own money. The wholesaler typically starts by identifying a potential seller - often a homeowner that owns a distressed or rundown property. The owner wants to sell but either can't or is reluctant to invest in fixing the property up for the maximum return. In many cases, the owner urgently needs to sell.
Can Rental Depreciation Offset Ordinary Income?
Real estate investors benefit from the tax shelter that real estate depreciation provides. Best of all, depreciation is a non-cash flow expense since it doesn’t impact an investor’s bank account. Some investors will have a large depreciation expense during a year, which can create an overall loss for their rental property. When that happens, can the loss be used to offset ordinary income?
