When someone hears 1031 exchange, they think real estate, but 1031 is incredibly diverse and flexible with a little planning. One sector of 1031 exchange that has really taken off is GOLD. Yes, you can exchange gold for other gold. Why exchange gold? If it is done properly, you avoid all the taxable gains on [...]
Section 1031 is a valuable tax tool for the real estate investor’s toolbox. Prior to recent rulings, an investor could purchase an investment property, rent it out for a few years, and then convert the property to their primary home. Should they decide to sell it after the 5 year minimum holding period, they could [...]
Until recent rulings, it has been difficult to determine what the IRS expects when it comes to Vacation homes and how they are treated in the context of the 1031 exchange. Thanks to Revenue Procedure 2008-16 and Moore v. Commissioner, we now have clear guidelines as what would qualify and what would not. In order [...]
Whenever I tell someone that we are a Qualified Intermediary for 1031 Exchanges, I almost always get the response “1031?! Are people still doing those? I didn’t think those were still being done in this economy.”
At first glance, the idea of increasing the Capital Gains rate seems like a bad thing. How could increasing tax rates ever be a good thing? Well, for all of us Qualified Intermediaries, this is means potentially more business for us. For those of you Realtors out there who are familiar with 1031 exchanges, this could be your golden opportunity. For those who are a little hazy on what exactly a 1031 exchange is, allow me to give you a brief synopsis. 1031 is a section of the tax code that states if you sell investment real estate and purchase investment real estate of equal or greater value, you defer not only all capital gains, but any applicable depreciation recapture and state taxes. This is a key point to note. You will often hear people say, “I’m just going to cash out, pay my 15% and be done with it.” That may or may not be the case. Sometimes they are looking at paying substantially more than 15%.
Savvy Sanibel and Captiva real estate investors are always looking for deals, and now may be the best time. The Golden Rule of real estate investing has not changed – the profit is made by purchasing at the right price and not over paying. The rule on Sanibel and Captiva has never been truer. For buyers getting property at the right price, the tax laws have never been more favorable.
The question is, how long to I have to hold investment real estate before it qualifies for 1031 treatment?