What Happens to An Installment Sale at Death?
As we’ve mentioned in previous blogs, owning real estate as an investment can generate many benefits. And as we’ve also mentioned in previous blogs, selling appreciated real estate can trigger capital gains and depreciation recapture taxes. The sale could also lead to a higher income bracket, meaning more taxes.
Delaware Statutory Trusts (DSTs) And 1031 Exchange Requirements: What You Need to Know
26 U.S. Code § 1031 – known more commonly as the “1031 exchange” or “like-kind exchange,” allows investors to “swap” real estate holdings. When performed correctly, the 1031 exchange can help defer taxes on capital gains or depreciation recapture taxes. The requirement is that the relinquished and replacement properties must be used for investment or business purposes.
Selling 1031 Exchange Property: What You Need to Consider
Using a 1031 exchange to defer the payment of capital gains taxes on the sale of investment property is an attractive tool for many investors. Successful execution of the exchange will allow a taxpayer to defer paying taxes on the capital gain that an investment property has accrued. Naturally, the IRS is specific about what does and doesn't qualify for this favorable tax treatment. Taxpayers must judiciously adhere to the stipulations to reap the benefits.
How Can You Offset Passive Losses In Real Estate?
Ordinary income is taxed at some of the highest rates. This is income generated from a regular job. Wealthier clients often generate much of their income passively. However, some of it is still taxed at high ordinary income rates.
What Are The Differences Between Direct And Indirect Property Investments?
Investment strategies fall into two main categories: direct and indirect.
Is Step-Up In Basis Necessary?
When an heir inherits property at the owner's passing, a step-up in basis comes into play. Because of the step-up in basis, there are tax advantages for heirs. But do heirs have a choice, or can they elect out of a step-up in basis? Let's find out.
How Are Capital Gains Calculated On Sale Of Rental Property?
Understanding the calculation of capital gain when selling a rental property is crucial for smart financial planning. The first step in this calculation is to subtract the property's adjusted basis at the time of the sale from the total sales price. This must include any sales expenses such as legal fees and commissions. The resulting figure will be your capital gain on the sale. In order to provide a clear understanding of this process, we will explore this calculation using a hypothetical example in the following sections of our article.
Can I Buy a Property First and Then Do a 1031 Exchange?
Timing often plays an important role in the acquisition of commercial real estate, especially in competitive markets where properties may receive multiple bid offers from a pool of eager investors.
Can One Joint Tenant Mortgage Property?
Joint tenancy is a form of real estate property ownership. Two or more parties legally agree to own and manage the real estate assets through a joint tenant agreement. This legally binding agreement is formalized through a deed on which all parties are listed.
Do You Have to Replace the Debt in a 1031 Exchange?
When you’re involved in a 1031 exchange, you must invest the proceeds from the sale of your relinquished property into a replacement property (or properties) of greater or equal value. This is important if you want to potentially defer taxes on capital gains or depreciation recapture.
