When was the 721 Exchange Created?
The 721 exchange, also known as a contribution or an Umbrella Real Estate Investment Trust (UPREIT) exchange, is a tax-deferred transaction that allows investors to exchange their ownership in a property for ownership in a larger, more diversified real estate investment without incurring immediate taxes on the gains from the sale of the original property.
What is an Example of Capital Gains Income?
Saving to build a financial nest egg is important in all stages of life. Investing some of your savings can be an effective way to grow your personal wealth and ensure a comfortable retirement.
How Are Mortgage Rates Determined?
Your mortgage interest rate can substantially impact your monthly payment and even your ability to qualify for a home or investment loan. You have probably noticed that rates are volatile, increasing from below three percent last year to recent rates of over seven percent for a 30-year fixed loan before settling into the 6.5 percent range. By comparison, back in the early 1980s, mortgage rates hit 18 percent.
What is an Example of an Installment Sale?
Completing a 1031 exchange is a common way for real estate investors to defer capital gains tax liabilities on the sale of investment properties.
The History of Capital Gains Taxes
Any time you sell an investment asset for a profit, you’ll generate capital gains tax on those proceeds. These assets can include stocks, bonds, precious metals, cryptocurrencies, and similar investments, as well as commercial real estate.
Do You Need to File Form 8824 for a Reverse Exchange?
Moving quickly in a hot real estate market can mean the difference between getting a great property and a mediocre one. A 1031 exchange is a way to defer taxes on capital gains when a property is sold. However, a 1031 requires first selling your original property before you can buy the new property. That’s because a 1031 exchange uses proceeds from selling your existing property to buy the new property.
[Webinar Recap] How To Treat Your DSTs During Tax Season - Managing Income Tax and Cash Flow
Here at Realized, we help our clients use 1031 Exchanges to buy and sell real estate. 1031 Exchanges help investors legally defer capital gains taxes on real estate sales by exchanging one property for another like-kind property. In addition to direct real estate, one form of like-kind property investors can exchange into is a Delaware Statutory Trust, or DST. DSTs can be a tool for growing your real estate portfolio, but they can also be tricky to manage when tax season comes around.
What Happens to Depreciation Recapture in an Opportunity Zone?
There’s been a great deal of discussion about the Opportunity Zone Program since its introduction as part of the Tax Cuts and Jobs Act of 2017. The program’s focus is on investors with capital gains resulting from the sale of capital assets. Specifically, investors funnel those gains into Qualified Opportunity Funds. The QOFs, in turn, use that money to benefit federally designated, generally low-income Qualified Opportunity Zones.
Can You Use a 1031 Exchange to Pay Off Debt?
To take full advantage of 1031 exchange tax deferral benefits, investors must follow a number of rules. Some of these rules outline the use of proceeds for paying off debt. Investors can’t use proceeds to pay off debts such as credit cards, car loans, or other personal loans. However, some debts can be paid off as long as 1031 exchange debt restrictions are followed.
Can REITs Invest in Opportunity Zones?
Investors like REITs (Real Estate Investment Trusts) mostly for their dividends. After all, REITs must distribute 90% of their income through dividends. But if you've read about opportunity zones and are interested in investing in them, can you do it through REITs?
