1031 Exchange Backup Plans: What to Do If Your Replacement Property Falls Through
Navigating the world of 1031 exchanges can be as exhilarating as it is complex. Imagine this scenario: you've just sold your investment property, meticulously planned your exchange, identified a promising replacement property, and then—out of nowhere—the deal falls through. Anyone who has experienced this knows it feels like being on a high-speed train that suddenly derails. So, what should you do?
How to Talk to CPAs and Attorneys About 1031 and DST Strategies
Navigating the complexities of investment property transactions can be daunting, especially when it involves intricate processes like 1031 exchanges and Delaware Statutory Trusts (DSTs). It's crucial for property owners to engage effectively with Certified Public Accountants (CPAs) and attorneys who play pivotal roles in these transitions. Here’s a guide to help you communicate more effectively with these professionals.
Understanding ‘Prohibited Activities’ Under Revenue Ruling 2004-86
Delaware Statutory Trusts (DSTs) became eligible for 1031 exchanges under Revenue Ruling 2004-86, which outlined the structure of qualified DSTs. The decree also mandated prohibited activities that would disqualify the DST from tax-deferral benefits. These so-called “seven deadly sins” are mostly a concern for DST sponsors, but knowing them as an investor helps you evaluate the compliance and long-term stability of the DST investment. Realized 1031 goes in-depth about these prohibited activities below.
Income Targeting vs. Total Return in Passive Property Vehicles
In the world of real estate investment, particularly when dealing with passive property vehicles such as Real Estate Investment Trusts (REITs) and Delaware Statutory Trusts (DSTs), investors must often choose between two distinct strategies: income targeting and total return. Each approach offers unique benefits and risks, suited to different investor goals and market conditions.
What Happens to An Irrevocable Trust When The Grantor Dies?
Estate planning is crucial for preserving wealth and ensuring a smooth transition of assets. An irrevocable trust is often used as part of an estate planning strategy.
Setting Up a Financial Power of Attorney
If you own investment real estate, securing a financial power of attorney (POA) may be an important tool for protecting and managing your assets. A POA may authorize a designated individual to oversee real estate and other assets if you become unable to do so.
