What is the 45-Day Deadline for a 1031 Exchange?
When taxpayers execute a 1031 exchange, they must adhere to the rules, including the timing deadlines. In brief, a 1031 exchange allows you to defer payment of capital gains taxes when you sell an investment property if you replace it with a "like-kind" property of the same or greater value. If you think about it, that enables you to leverage your gain to reinvest the entire proceeds from a sale rather than diverting a portion of it to pay taxes. As a result, this tool becomes a valuable part of their investment strategy for many investors.
What are the Pros and Cons of Bridge Loans?
Bridge loans can allow buyers to purchase a new home without first selling their old house. If there is a dependency on selling the old home, the buyer must make a contingency offer. Because some sellers prefer non-contingent offers, contingent buyers can be left out.
Can You Do A 1031 Exchange With A Loan?
The 26 U.S. Code § 1031—“Exchange of real Property Held for Productive Use or Investment”—can be useful if you’re interested in potential capital gains tax deferrals on the sale of certain types of real estate. Part of the process involves exchanging into a property of equal or greater value than the one you’re relinquishing.
What Is Vacancy Rate And How Do You Calculate It?
Whether you’re considering direct ownership of investment real estate or buying fractional shares in a Delaware Statutory Trust (DST), you need to know the numbers. There is the capitalization rate, or cap rate. Also important are the price-to-rent ratio and cash-on-cash return.
What is a Bridge Loan and How Does it Work?
Investors or residents who want to buy a house usually have to first sell their old house to raise cash for a down payment. However, this can be problematic because of timing. If the new house is a hot item, waiting for the old house to sell can mean missing out on a great deal.
How Can I Avoid Paying Capital Gains Tax on Gifted Property?
Transferring property to an individual and receiving nothing or less than the asset’s full market value in return may trigger the Internal Revenue Service’s gift tax. Capital gains taxes also may be a consideration if you divest gifted property rather than receiving it as an inheritance.
Can a Trustee Be a Beneficiary of an Irrevocable Trust?
Trusts can be helpful tools for estate planning and tax management. It’s important to know the difference between the types of trust if you intend to use them for these goals. For example, an irrevocable trust can’t be changed or terminated unless the beneficiary agrees to the modifications. That is a significant difference from a revocable trust.
What is Capital Gains Yield?
Investors can use a variety of methods to determine the profitability of their investments.
Which Investment Type Typically Carries the Least Risk?
The tradeoff between investment risk and reward (or potential return) is one that every investor needs to decide individually. That balance will likely change depending on the investor’s goals, circumstances, and age. But many investors seek a balance between risk and reward by hedging their portfolio allocation according to their risk appetite. For example, the traditional 60/40 portfolio consists of sixty percent equities and forty percent fixed-income instruments, like bonds. The stocks typically offer a more significant opportunity for growth but carry the risk of loss. In contrast, the bonds provide a smaller potential value increase and often less volatility. In theory, the stocks offer growth over the long term, while the fixed income holdings provide a hedge to help manage exposure to periodic value drops.
What Does It Mean to Be In a Zero Tax Bracket?
When you look at the tax brackets, they all have a rate greater than zero. You'll be taxed no matter your income, according to the tax brackets. But there is such a thing as the zero tax bracket. It just isn't listed. You have to do some calculations before you can determine if you're in it or not. Let's dive into what it means to be in a zero tax bracket.
