Search
Investment Real Estate
Search Local Residential Listings
MLS.com is a free MLS search to find real estate MLS listings for sale by Realtors� and other realty professionals that are members of your local MLS Multiple Listing Service.
Click HERE to begin searching.
Featured Articles
GO GREEN
Everyone has ideas about greening residential real estate, but what about commercial investment property going green. Share your experiences or questions…comment here!
[Read More...]
[Read More...]
Mandatory Access for Telecommunications Providers?
Mandatory Access to Commercial Property for Telecommunications Providers?
How do the contracts between commercial or multi-family property owners affect Tenants? The FCC is asking for your comments on an issue that could affect who has access to your property.
[Read More...]To Exchange or Not to Exchange…that is the Question!
Whether ‘tis better to sell and pay taxes or by deferring gain to leverage your portfolio?
Section 1031 of the Internal Revenue Code provides that neither gain nor loss is recognized if property held for investment use in trade or business is exchanged for like property. The term “like kind” refers to the grade or quality of the property, not a specific type or class. Thus, single family rentals can be exchanged for a retail strip center, commercial or industrial property.
[Read More...]To Exchange or Not to Exchange…that is the Question!
Whether ‘tis better to sell and pay taxes or by deferring gain to leverage your portfolio?
Section 1031 of the Internal Revenue Code provides that neither gain nor loss is recognized if property held for investment use in trade or business is exchanged for like property. The term “like kind” refers to the grade or quality of the property, not a specific type or class. Thus, single family rentals can be exchanged for a retail strip center, commercial or industrial property. The Delayed Exchange is the most commonly utilized strategy, validated by the 1979 federal case, Starker v. U.S. 602 F2d 1341, 9th Circuit. The seller retains a Qualified Intermediary to facilitate the exchange so that the Seller never has actual or constructive receipt of the funds. The Seller has 45 calendar days from the date of sale of the relinquished property to identify an exchange property and 180 days to close on the replacement property.
There are very specific rules as to documentation, designation, and delivery and so it is very important to have confidence in the Qualified Intermediary handling your transaction. You will need to focus all you attention on finding the exchange property which presents various challenges in any market. You have three options for identification during the 45 days:
Select three properties, regardless of fair market value.
Pick any number of properties, provided that the aggregate fair market value does not exceed 200% of the fair market value of all the relinquished properties.
Any number of properties may be selected with no restriction on value, provided that you acquire 95% of the value of the identified properties.
The Reverse Exchange is less stressful but less stress comes at a price. The Seller acquires the replacement property prior to the sale of the relinquished property, utilizing an Exchange Accommodation Titleholder to hold title until the Seller has sold the relinquished property. The 180 day rule applies as with the delayed exchange and there are various requirements and additional insurance complicating the Title Parking process.
The Simultaneous Exchange, Improvement Exchange, and Personal Property Exchange are addressed as well under IRC § 1031 and the best time to evaluate these options is during the evaluation process.
Explore all options with your Realtor and once you have made the decision to exchange, there’s no shortage of experienced Qualified Intermediaries to explain in further detail what you can expect and how much the tax savings will cost.
Leave a Reply
New Articles by Topic
1031 Exchange - Exchanging Property You Didn’t Know You Had
Transferable Development Rights for Real Property “Development Rights” is defined as unused rights to develop a property to the extent permitted under state or local law. As states and municipalities hav...
Articles - AB 2204 Could Affect the Cost of Transferring Property
AB 2204 is currently making it's way through the legislature. It is designed to fight discrimination in the real estate market but its effectiveness has been called into question and it's costs are great. The Bill will require a title insurance company to strike any racis...
Greater Los Angeles Area - Do You Support Subway to the Sea?
The proposed "Subway to the Sea" will extend the Red Line from the current terminus at Wilshire Blvd. and Western Ave., heading west along Wilshire Blvd to Beverly Hills, Century City, Westwood and UCLA and on to the Pacific Ocean in Santa Monica, the Wilshire corridor subway will form the es...
Articles - Interest Rate Slashed to 1 Percent
The Federal Reserve announced Wednesday, October 29th that they will reduce interest on federal funds by half a percent. This brings the interest rate to 1 percent, the lowest it has been since 1958. This ...
Green Power - Hot Weather is Here and You can Help your Tenants Save Money and the Environment
California Edison customers receive rebates when they receive certified air conditioning tune-ups, subject to verification.
1. To be eligible for the rebate: (a) I must be a Southern California Edison customer on a residential, GS-1 o...