Article on Sep 4, 2024 721 Exchange to Defer Taxes: Pros and Cons A 721 exchange, also known as a UPREIT (Umbrella Partnership Real Estate Investment Trust) transaction, allows real estate owners to defer capital gains taxes by exchanging their property for operating partnership units in a REIT. Pros include tax deferral, diversification of real estate holdings, and potential for ongoing income. It can also provide estate planning benefits and relief from property management responsibilities.
Article on Aug 26, 2024 Can An LLC Do A 1031 Exchange? Can An LLC Do A 1031 Exchange? LLCs became a popular form of real estate ownership as they limit the...
Article on Aug 12, 2024 1031 Exchange vs. Qualified Opportunity Zones: Which Is Better? 1031 Exchange vs. Qualified Opportunity Zones Instant & Long-Term Tax Advantages Today investors can structure real estate investments to generate...
Article on Aug 6, 2024 Qualified Opportunity Zones: Your Antidote to Economic Anxiety in Tumultuous Times Looks like the end of the world is near. There is chaos everywhere. There are multiple wars in far-off countries,...
Article on Jul 17, 2024 How Savvy Investors Use A 1031 Exchange To Defer Capital Gains and Build Wealth 1031 exchange to defer capital gains Before putting a real estate property up for sale or deciding to purchase another,...
Article on Jul 7, 2024 Passive Real Estate Investing With A Delaware Statutory Trust A Delaware Statutory Trust (DSTs) enables passive real estate investing into large-scale multifamily, retail, and commercial properties managed by industry experts. Investors benefit from stable cashflow, diversification, tax deferral through 1031 exchanges, and hands-off ownership in institutional-quality assets.
Article on Jun 29, 2024 Exchange Real Estate Headaches for Silent and Passive Income A 1031 Tax Deferred Exchange combined with a Delaware Statutory Trust (DST) offers real estate investors a solution for tax savings and passive income. DSTs allow investors to participate in large-scale commercial properties without the hassles of direct ownership. This strategy is ideal for retirees or those looking to escape the headaches of managing rental properties. By using a 1031 exchange to invest in DSTs, investors can defer capital gains taxes and receive regular, tax-advantaged monthly income. DSTs are offered by established real estate firms and provide access to high-quality properties with professional management. This approach solves tax issues while providing reliable passive income.
Article on Jun 12, 2024 Why the Attack on 1031 Exchanges Is Likely to Fail (Again) President Biden's proposed budget for fiscal year 2025 includes a $500,000 annual cap on capital gains tax deferrals through 1031 exchanges. While this proposal would be devastating to real estate investors and the economy, it is unlikely to become law. The president's budget is primarily a political document, not a practical one, and often includes items that have little chance of success but serve to signal priorities and appease constituencies. Similar proposals have failed in the past, and this one is expected to meet the same fate. Investors should stay informed but avoid making panic-driven decisions.
Article on Jun 12, 2024 Can You 1031 Exchange into a REIT? While a 1031 exchange directly into a REIT is not allowed, investors can still defer capital gains taxes and access institutional-quality real estate through two alternatives: UPREITs (721 exchanges) and Delaware Statutory Trusts (DSTs). UPREITs allow investors to contribute property to an operating partnership for units that can later convert to REIT shares tax-free. DSTs offer fractional ownership in diverse property portfolios, combining direct ownership benefits with professional management. Both options provide tax efficiency, passive income, and exposure to high-quality assets otherwise inaccessible to individual investors, making them compelling solutions for those seeking to redeploy investment proceeds.
Article on May 31, 2024 It’s Not Too Late to Defer 2023 Capital Gains Taxes The article discusses strategies for investors to defer capital gains taxes realized in 2023. One key option highlighted is investing the gains into a qualified opportunity zone (QOZ) fund, which can defer the original capital gains taxes until at least the end of 2026, and potentially exempt future gains if held for 10 years or more. The article notes that partnerships have added flexibility, with extended deadlines that allow partners to reinvest gains into a QOZ fund by as late as September 2024. However, the article cautions that QOZ investments require careful research, as they are generally illiquid long-term commitments with varying returns. The advice is to work with tax and financial professionals to navigate the program requirements and identify the right QOZ investment for deferring 2023 capital gains.
Article on May 26, 2024 Considering a 1031 Exchange? The Rules You Need to Know The article explains the key rules and strategies around the 1031 tax-deferred exchange, a powerful tool for real estate investors. Fundamentally, a 1031 exchange allows investors to defer capital gains taxes by reinvesting the proceeds from the sale of one investment property into a "like-kind" replacement property. The article outlines the strict timelines involved, the requirement to reinvest the full sale proceeds, and the different exchange structures available. It cautions that professional assistance is critical to navigate the complexities and avoid costly mistakes. Ultimately, the 1031 exchange can be a valuable way to indefinitely defer capital gains, unless the investor decides to cash out, in which case the taxes become due.
Article on Apr 14, 2024 Should I Invest In A DST? The article examines the growing popularity of Delaware Statutory Trusts (DSTs) among accredited real estate investors. DSTs offer several benefits, including the ability to defer capital gains taxes through a 1031 exchange, earn passive income, access institutional-quality properties, and avoid the hassles of direct property management. With over $20 billion raised in DST investments since 2004, they have become an increasingly attractive option for investors seeking to reinvest real estate proceeds while deferring taxes. However, the article cautions that DSTs may not be the right fit for every investor, and advises consulting with a DST specialist to determine if the structure aligns with one's investment goals and risk profile.
