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.
Article on Apr 9, 2024 Delaware Statutory Trust (DST) – Pros and Cons A Delaware Statutory Trust is touted by many who sell them as the best thing going for real estate investors,...
Article on Apr 3, 2024 How A Phone Call Saved My Friend Over $50,000 Using A 1031 Exchange Sometimes it’s better to be lucky than good, and the timing of a phone call from a friend of mine...
Article on Mar 14, 2024 Opportunity Zone Investing Still Hot Despite Looming Sunset With tax breaks for opportunity zone investments set to expire soon, project demand surges as investors race for final capital gains shelter before regulations change. Yet amidst fears opportunities vanishing, experts predict increasing allure from building development momentum creating fertile economic grounds propelling yet unseen yields in carefully vetted projects. Though incentives may shift, unique assets at relative discounts bought strategically inside overhauled communities promising to reward prudent allocations likely will continue generating wins without deferral carrot catalyzing initial action solely. Legacy benefits outlast initial shelter alone.
Article on Feb 28, 2024 How To Not Screw Up A 1031 Tax-Free Exchange How To Not Screw Up A 1031 Tax-Free Exchange Without question, real estate is one of the very best ways...
Article on Feb 19, 2024 Tax Straddles and 1031 Exchanges: What Investors Need to Know If timed incorrectly between selling at a tax loss and acquiring asset replacements, the IRS may deny recognizing capital losses meant to offset gains by classifying as prohibited "wash sales". Taxpayers pursuing both loss harvesting and tax-deferred 1031 strategies must understand specific rules governing sequencing and timing between transactions to avoid negative liability impacts.
Article on Feb 11, 2024 4 Reasons to Tap Opportunity Zones Before They Expire Opportunity Zones offer valuable tax incentives for investments in designated underdeveloped areas which are set to expire soon. The preferential capital gains treatment on proceeds reinvested into Opportunity Funds will discontinue after 2026 per current legislation. With under half of tracts having seen money inflows so far, officials are urging investors to accelerate allocating funds before tax breaks disappear, hindering further community revitalization dependent on sustained private investment into these regions. Exploring locations and development projects ahead of expiration makes sense given dwindling timeframes to utilize zone advantages.
Article on Jan 22, 2024 1031 Exchanges: A Matter of Life and Death? Selling appreciated investment real estate sans exit planning triggers monumental capital gains taxes erasing wealth built over years. Steep levies forcing liquidation burns through equity funding future retirement. But tax-deferral solutions exist - investors can exchange properties while rolling gains into diversified real estate assets like Delaware Statutory Trusts, mirroring 1031 benefits. Essentially trading existing buildings for fractional stakes in larger portfolios defers tax events. Education is essential beforehand so hard-fought empires don't crumble needlessly overnight from lack of vision when vehicles now sustain wealth long-term.
Article on Nov 13, 2023 Delaware Statutory Trust: A Viable Alternative to Debt Replacement Delaware Statutory Trusts allow investors to defer capital gains taxes by placing profits into multifamily and commercial real estate. These professionally managed investments provide passive income potential with diversification benefits compared to sole property ownership.