Steps to Set Up a Living Trust
If you own investment property, estate planning can be an important tool to manage your assets and ensure they reach your designated beneficiaries. One way to accomplish this is with a living trust.
Tax Implications of a Delaware Statutory Trust
Investment in a Delaware Statutory Trust (DST) could offer a few benefits:
Realized vs. Unrealized Gains: Differences and Tax Implications
Realized and unrealized gains represent profits from the sale of assets. However, that’s the only similarity between the two terms.
Important information to Know About Depreciation and Real Estate Sales
Real estate assets undergo wear and tear and other factors that can impact their useful life. This opens the door to depreciation, which can help reduce your tax liability while you own investment or business property.
How To Convert a Like-Kind Acquired Rental Property Into a Primary Residence
There may come a time when you want to turn an investment rental property acquired through a 1031 exchange into a primary residence. While the process is usually not complicated, converting real estate assets acquired through a like-kind exchange could pose several challenges. The IRS has strict rules regarding the use of such assets. Failure to comply could result in the loss of your tax-deferred status.
An Explanation of UPREITS and Dividend Payments
If you’re an investor interested in moving from direct to passive real estate ownership, contributing your property to a real estate investment trust (REIT) using the Section 721 exchange could be a viable tax-advantage strategy to help defer capital gains taxes.
Qualifications for Reducing Capital Gains Tax
Capital gains taxes are an expense that can increase the cost of selling real estate assets. If you sell your assets for a profit, you’ll owe a certain amount–0%, 15%, or 20% of the proceeds--to the IRS. Additionally, depreciation recapture (taxed up to 25%) and the 3.8% Net Investment Income Tax (NIIT) may apply, depending on income level and prior deductions.
The Opportunities and Challenges of 1031 Exchange Oil & Gas Properties
Section 1031 of the Internal Revenue Code (IRC) is typically used for real estate held for business or investment purposes. However, the like-kind exchange can also be useful for oil and gas properties in certain situations.
Decoding Financial Statements When Exchanging DSTs into REIT Shares via Section 721
There are many ways to be involved with real estate ownership. There is direct ownership, which involves hands-on management and decision-making. Then there is passive ownership, including Delaware Statutory Trusts (DSTs) or real estate investment trusts (REITs).
The Downsides of a 1031 Exchange
A 1031 exchange can be a helpful way for you to defer recognition of capital gains on the sale of investment or business real estate while allowing you to enhance your portfolio. By exchanging your investment or business use property for like-kind real estate of equal or greater value, you could postpone tax obligations, leaving you with potentially more money for other investments.
