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?
How Are REIT Dividends Taxed?
REIT dividends can have a mixture of taxation. This all depends on the specific REIT. Because of these differences, understanding the taxation of REIT dividends can be somewhat complex. In this article, we’ll discuss how REIT dividends might be taxed.
Can You Offset Capital Gains with Losses from Prior Years?
A realized loss during a year can mean a lower tax bill. This loss is generally offset against other gains or income. Some people refer to this as shielding taxable income. However, there are rules on how losses are applied against income. What about losses from previous years? Do the same rules apply? Let’s find out.
What Qualifies for a 1033 Exchange?
Ben Franklin famously wrote that, “in this world, nothing is certain except death and taxes.” While not a certainty, it can be expected that something bad will happen in a part of the country in which you live or hold investment real estate. Tornados, mudslides, floods, wildfires, hurricanes, and other natural disasters have become common seasonal events.
What is Ordinary Income?
Paying taxes on monies received can be confusing. This is because there are various ways in which you might receive funds.
