President Bush Signs Disaster Declaration for California Wild Fire Victims

President Bush stepped up federal engagement in the California wildfire emergency Wednesday, signing a major disaster declaration that funnels money to people whose property losses aren't covered by insurance. Read more.

Gain from the Destruction of your Primary Residence (Tax-Free Exclusion)

This post continues my discussion regarding the California wild fires and income tax relief and strategies available to the fire storm victims.

Homeowners who are insured and lose their principal residence can exclude from their taxable income up to $250,000 in capital gains per person ($500,000 for a married couple) pursuant to Section 121 of the Internal Revenue Code. The gain, if any, above the $250,000/$500,000 exclusion limitation can be reinvested in like-kind replacement property on a tax-deferred basis under Section 1033.

The insurance proceeds that you receive for your personal property contents is tax exempt.

Because a natural disaster such as the California wild fires is considered an unforeseen circumstance, disaster victims who lived in their primary residence less than the required two (2) years are able to take a partial tax-free exclusion under Section 121. 

Income Tax Relief for Victims of 2007 Southern California Wild Fires

The Internal Revenue Service (IRS) and the Franchise Tax Board (FTB) will be issuing guidance and notices shortly regarding relief for victims of the 2007 Southern California wild fires affecting the San Diego, Orange, Los Angeles, Riverside and San Bernardino areas.

I will be posting any and all relief notices here to assist wild fire victims in obtaining badly needed relief. Exeter 1031 Exchange Services, LLC will be posting all income tax relief notices for wild fire victims and fire storm related issues on its Exeter News Wire and has created a web page specifically for income tax relief information related to the Southern California wild fires.

Southern California Fire Storms

I am just one of over 300,000 people that have been directly affected by the Southern California wild fires. This will give everyone an update on our situation, but will also lay the ground work for my next few daily posts with news and announcements regarding assistance for Southern California fire victims, especially in terms of income tax relief.

We were evacuated from our home in Ramona on Sunday evening. I don’t know if you ever saw the movie Dante’s Peak, but it reminded me a lot of that movie. It was dark, lots of bright flames all around on the hill tops, way too much smoke so that it was difficult to breathe.

It was a mandatory evacuation with the fire about 2 miles away. We almost went to our friend’s home that was at the far west side of Ramona but decided to go down the hill and stay in a Marriott Residence Inn (they take animals by the way) off the 15 Fwy.

The fire was moving so fast that our friend was actually evacuated only 45 minutes later and was out before we even made it to the hotel. We were evacuated again from the hotel yesterday morning (we woke up with smoke in our room) and thought we would stay in a hotel in downtown SD, but everything is sold out.

We joined up with my fiance's family that is staying in motor homes and fifth wheels in the Wal-Mart parking lot. We thought we would be evacuating again last night because the fire crested the hill next to us, in front of us and behind us, but it retreated and I’m back at the office today.

It feels like I have smoked 100 cigars by this point, but thankfully we are all O.K. and our homes are O.K. at this point in time. They are beginning to talk about letting some people back into certain areas, but I doubt that will happen until tomorrow.

The Internal Revenue Service and the Franchise Tax Board will be issuing a number of notices shortly with income tax relief for victims of the Southern California fire storms, including San Diego County, Orange County, Los Angeles County, Riverside County and San Bernardino County.

I will be posting this relief on this blog as well on our Exeter Discussion Board.

Special Year End 1031 Exchange Considerations

The end of the year is almost upon us. So, I thought this would be a good time to start a thread on special considerations that need to be taken into account when completing a 1031 exchange at year end or that may over lap into the following year. There are a number of special 1031 exchange planning issues that you should be aware of.

This thread will expand on these issues and answer any questions that you might have regarding year end planning and 1031 exchanges. I will post each issue as a separate post in the next couple of days. In the meantime, here is a link to the Exeter 1031 Exchange Resource Library where you will find numerous articles on 1031 exchanges, including deadlines and year-end planning issues: http://www.exeter1031.com/EEL_ArticlesPublicationTechnicalReference.aspx.