How UPREITs Can Potentially Benefit Property Owners
Real estate investors are always searching for ways to save on taxes. One of the biggest tax events a real estate investor will face is when their property is sold for a profit. To mitigate tax consequences from the sale of property, investors will often use a 1031 exchange. However, a 1031 exchange isn’t the only tool available for tax mitigation. Its cousin, the 721 exchange, provides a few alternative benefits to investors.
How is Debt Treated in an UPREIT?
As a brief background: In a traditional REIT structure, the trust owns property directly or through limited partnerships. However, suppose an investor contributes real property to a REIT. In that case, the investor must recognize any increase in the value (fair market value over tax basis) that has occurred and would owe taxes on that amount.
The Role of UPREITs in the Evolving Real Estate Landscape
Plenty of articles in recent months have detailed real estate volatility, and for good reason:
The Role of Operating Partnership Units in UPREITs
Among the opportunities for fractional real estate ownership, one increasingly popular vehicle is the UPREIT (Umbrella Partnership Real Estate Investment Trust), a REIT with some distinct components that can help real estate owners.
What Are The 10% and 30% Rules for REITs?
When you dig into how REITs operate, they become fairly complex investments. Most of this isn’t as important for investors but is important for REIT operators. We will look at two specific restrictions or rules that REITs must follow.
How Do REITs Make Money?
In previous blogs, we've touched on the idea of passive income for investors. One way to pursue passive income is the Real Estate Investment Trust or REIT. Unlike other investments that strive to provide passive income, such as the Delaware Statutory Trust, REITs are positioned as securities. In other words, investors put their capital (via sponsors/management firms) into real estate companies, potentially receiving income in return.
