President Bush signed the Housing and Economic Recovery Act of 2008 yesterday, which contained some surprises.
Reduced Tax Free Exclusions on Sale of Home
The Housing Act included provisions that may reduce the amount of the tax free exclusion available to a taxpayer upon the sale of their primary residence if they had also used the home as a vacation home, second home, rental property, investment property or in their trade or business. These uses are referrred to as "non-qualified use."
Section 121 (121 Exclusion)
The current exclusion falls under Section 121 of the Internal Revenue Code. A taxpayer can exclude up to $250,000 in capital gains (per taxpayer; $500,000 for married couple filing jointly) from their taxable income if they have lived in their home as their primary residence for at least a total of 24 months out of the last 60 months.
Changes under the Housing Act of 2008
The Housing Act of 2008 will now prohibit a taxpayer from excluding part of the capital gain based on the number of years (percentage of total use) that the property was used for non-qualified use such as personal vacation usage or if it was held as rental property. These changes are summarized here.
Thursday, July 31, 2008
Monday, July 28, 2008
1031 Exchange Workshop in Irvine, California
07/30/2008
11:30 AM — 2:00 PM
1031 exchange workshop on the requirements, structures, processes, strategies, and compliance issues necessary to successfully complete a 1031 exchange. Continuing education credits available for Realtors, CPAs and CFPs. It's NOT just another 1031 exchange seminar.
Learn more
Intermediate Level
Irvine, California
11:30 AM — 2:00 PM
1031 exchange workshop on the requirements, structures, processes, strategies, and compliance issues necessary to successfully complete a 1031 exchange. Continuing education credits available for Realtors, CPAs and CFPs. It's NOT just another 1031 exchange seminar.
Learn more
Intermediate Level
Irvine, California
Saturday, July 26, 2008
The Fallout From Starbucks!
Those who are familiar with the commercial real estate market, or those who are 1031 exchange investors that acquire triple net leased properties through their 1031 exchanges, have probably heard about the announcement that Starbucks is closing 600 plus stores, and those who are not in real estate may have heard about it on the news.
It was certainly a surprise to hear that, but once you really think about it there is really no surprise at all. It will have some pretty significant consequences for landlords, developers, 1031 exchange investors, brokers and others.
I just read a blog post by Eric Odum entitled Starbucks: Do Not Foresake Me, Oh My Darling! It is a must read
It was certainly a surprise to hear that, but once you really think about it there is really no surprise at all. It will have some pretty significant consequences for landlords, developers, 1031 exchange investors, brokers and others.
I just read a blog post by Eric Odum entitled Starbucks: Do Not Foresake Me, Oh My Darling! It is a must read
Thursday, July 24, 2008
Combined 1031 Exchanges and 121 Exclusions May Be Changed
This should be good news for the 1031 exchange business, but not for taxpayers.
The House of Representatives has passed the Housing Bill, which has now been sent to the U.S. Senate for debate and vote. The Housing Bill contains a provision that will significantly change the structure of a combined 1031 exchange with a 121 exclusion.
Here is the down and dirty. The current language in the Bill says that a taxpayer can not exclude gain from a sale of property for the time that the property was used for non-qualifying uses (i.e. rental, investment, use in a business, etc.).
This means that if a taxpayer 1031 exchanges into property the gain that was deferred from the 1031 exchange could not be excluded under Section 121.
The U.S. Senate has to pass it and then the President must sign it, so a lot can change between now and then. We will keep you updated.
The House of Representatives has passed the Housing Bill, which has now been sent to the U.S. Senate for debate and vote. The Housing Bill contains a provision that will significantly change the structure of a combined 1031 exchange with a 121 exclusion.
Here is the down and dirty. The current language in the Bill says that a taxpayer can not exclude gain from a sale of property for the time that the property was used for non-qualifying uses (i.e. rental, investment, use in a business, etc.).
This means that if a taxpayer 1031 exchanges into property the gain that was deferred from the 1031 exchange could not be excluded under Section 121.
The U.S. Senate has to pass it and then the President must sign it, so a lot can change between now and then. We will keep you updated.
Tuesday, July 22, 2008
What Is Cost Segregation?
Cost Segregation Tax Savings Benefit Analysis
If you as a commercial real estate investor have completed a 1031 exchange and the replacement property you purchased cost more than the property or properties you sold, you may be eligible for substantial state and federal tax savings that you can only obtain through a cost segregation study.
A cost segregation study is a strategic analysis that allows owners of commercial real estate to increase their cash flow by accelerating depreciation-related tax deductions. To do so, the study identifies, segregates and reclassifies property costs currently being depreciated over the typical 39-year depreciable period to shorter depreciable periods of 15, 10, 7 or even 5 years. This means you can enjoy tax deductions right now that you’d otherwise have to wait years to receive. So you’ll not only increase the net value of current tax savings, but also boost your cash flow.
If you as a commercial real estate investor have completed a 1031 exchange and the replacement property you purchased cost more than the property or properties you sold, you may be eligible for substantial state and federal tax savings that you can only obtain through a cost segregation study.
A cost segregation study is a strategic analysis that allows owners of commercial real estate to increase their cash flow by accelerating depreciation-related tax deductions. To do so, the study identifies, segregates and reclassifies property costs currently being depreciated over the typical 39-year depreciable period to shorter depreciable periods of 15, 10, 7 or even 5 years. This means you can enjoy tax deductions right now that you’d otherwise have to wait years to receive. So you’ll not only increase the net value of current tax savings, but also boost your cash flow.
Saturday, July 19, 2008
1031 Exchange Seminar in Torrance, CA on July 23rd
07/23/2008
11:30 AM — 2:30 PM
1031 exchange workshop on the requirements, structures, processes, strategies, and compliance issues necessary to successfully complete a 1031 exchange, including a discussion of Tenant-In-Common (TIC) investment properties as 1031 exchange replacement property solutions. Continuing education credits available for Realtors, CPAs and CFPs.
Learn More
Intermediate Level
Torrance, California
11:30 AM — 2:30 PM
1031 exchange workshop on the requirements, structures, processes, strategies, and compliance issues necessary to successfully complete a 1031 exchange, including a discussion of Tenant-In-Common (TIC) investment properties as 1031 exchange replacement property solutions. Continuing education credits available for Realtors, CPAs and CFPs.
Learn More
Intermediate Level
Torrance, California
Thursday, July 17, 2008
Failed 1031 Exchange Taxation Issues When Qualified Intermediary Fails
I have received numerous calls over the years, and a signficant number of calls after last year's failures of two 1031 exchange Accommodators, asking about the taxation of a failed 1031 exchange once or if the taxpayer's Accommodator fails and files for bankruptcy protection.
It is a very sad and unfortunate event when a taxpayer's 1031 exchange Accommodator fails, and is even more frustrating when it is because of a theft of 1031 exchange funds.
Chief Counsel Issues Letter
We now have some guidance, although it is not binding and is not an IRS Ruling of any sort, but it is guidance non-the-less.
The IRS's Office of Chief Counsel issued an informational letter (INFO Letter No. 2008-0021) regarding the income tax consequences of a failed 1031 exchange transaction due to the failure of the Qualified Intermediary (also referred to as a QI).
The IRS was responding to a inquiry made by Congressman Delahunt of Massachusetts on behalf of his constituents that had lost money through a failed 1031 exchange transaction because their 1031 exchange Qualified Intermediary had failed and filed for bankruptcy law protection.
It is a very sad and unfortunate event when a taxpayer's 1031 exchange Accommodator fails, and is even more frustrating when it is because of a theft of 1031 exchange funds.
Chief Counsel Issues Letter
We now have some guidance, although it is not binding and is not an IRS Ruling of any sort, but it is guidance non-the-less.
The IRS's Office of Chief Counsel issued an informational letter (INFO Letter No. 2008-0021) regarding the income tax consequences of a failed 1031 exchange transaction due to the failure of the Qualified Intermediary (also referred to as a QI).
The IRS was responding to a inquiry made by Congressman Delahunt of Massachusetts on behalf of his constituents that had lost money through a failed 1031 exchange transaction because their 1031 exchange Qualified Intermediary had failed and filed for bankruptcy law protection.
Saturday, July 12, 2008
Options for Partnership Treatment When 1031 Exchanging
Real estate investors often use the 1031 exchange as a strategy to dispost of real estate and acquire replacement real estate without incurring an immediate income tax liability.
Partnership Issues
The issues involved with the disposition of real estate when the property is acquired and held within a partnership, including general partnerships, limited partnerships or multiple member limited liability companies can be extremely complicated.
Read this blog post for more details.
Partnership Issues
The issues involved with the disposition of real estate when the property is acquired and held within a partnership, including general partnerships, limited partnerships or multiple member limited liability companies can be extremely complicated.
Read this blog post for more details.
A Guide to 1031 Exchanges
The newly released publication A Guide to 1031 Exchange Services is now available free of charge.
This 21 page guide book to 1031 exchanges provides real estate investors with all of the critical information needed to complete their 1031 exchanges in one easy to use and follow guide book.
You can request and download your copy from the following web page: http://www.exeter1031.com/RequestBrochure.aspx. Keep it at your finger tips for quick reference.
This 21 page guide book to 1031 exchanges provides real estate investors with all of the critical information needed to complete their 1031 exchanges in one easy to use and follow guide book.
You can request and download your copy from the following web page: http://www.exeter1031.com/RequestBrochure.aspx. Keep it at your finger tips for quick reference.
Saturday, July 05, 2008
Tax-Deferred, Like-Kind Exchange Seminar in Torrance, CA with CE Credits for Realtors, CPA and CFPs
This is an intermediate level tax-deferred, like-kind exchange seminar on forward, reverse and build-to-suit tax-deferred, like-kind exchanges.
Tax-Deferred, Like-Kind Exchange Seminar Program
This tax-deferred exchange seminar will cover the various tax-deferral and tax-exclusion income tax strategies, including Section 1031 with Section 121 combinations. The topics will focus on the requirements, structures, processes, strategies, and compliance issues necessary to successfully complete a tax-deferred, like-kind exchange transaction.
The program will complete with an discussion of the new fractional ownership opportunities of TIC or CORE investment properties used as like-kind replacement property solutions for tax-deferred, like-kind exchange transactions.
Who Should Attend This Educational Seminar?
Real estate investors that are interested in learning much more on the processes and requirements for completing successful tax-deferred, like kind exchange transactions, including investment property owners, accountants, attorneys, corporate officers, certified financial planners and real estate agents and brokers (Realtors©).
Continuing Education Credit Provided (DRE, CE)
Two (2) hours of continuing education credit will be provided to:
Beverages will be provided compliments of Exeter 1031 Exchange Services, LLC and SCI Real Estate Investments.
Reservations Required
You can visit our web page at: http://www.exeter1031.com/1031_exchange_seminar_torrance.aspx to learn more about this tax-deferred, like-kind exchange seminar to be held in Torrance, California.
Tax-Deferred, Like-Kind Exchange Seminar Program
This tax-deferred exchange seminar will cover the various tax-deferral and tax-exclusion income tax strategies, including Section 1031 with Section 121 combinations. The topics will focus on the requirements, structures, processes, strategies, and compliance issues necessary to successfully complete a tax-deferred, like-kind exchange transaction.
The program will complete with an discussion of the new fractional ownership opportunities of TIC or CORE investment properties used as like-kind replacement property solutions for tax-deferred, like-kind exchange transactions.
Who Should Attend This Educational Seminar?
Real estate investors that are interested in learning much more on the processes and requirements for completing successful tax-deferred, like kind exchange transactions, including investment property owners, accountants, attorneys, corporate officers, certified financial planners and real estate agents and brokers (Realtors©).
Continuing Education Credit Provided (DRE, CE)
Two (2) hours of continuing education credit will be provided to:
California real estate agents/brokers
Certified Public Accountants (CPAs)
Certified Financial Planners (CFPs)
Beverages will be provided compliments of Exeter 1031 Exchange Services, LLC and SCI Real Estate Investments.
Reservations Required
You can visit our web page at: http://www.exeter1031.com/1031_exchange_seminar_torrance.aspx to learn more about this tax-deferred, like-kind exchange seminar to be held in Torrance, California.
Tuesday, July 01, 2008
Introducing Sid Jain with MoneyMallUSA
Real estate investors are always looking for new real estate and investment resources. I would like to make the introduction to Sid Jain.
Biography
Sid’s personal experience in the Financial Services Industry is 18+ years in the USA. Prior to that he worked for four years in India, where he worked with Reliance Industries in their Retail Marketing Division, creating fabric showrooms and handled Financial Instruments, raising money for the company. He holds MA Economics from University of Jabalpur (Now RD University) and BA Economics and Math, from St. Aloysius College. He was educated from Grade K through High School, at one of the finest, private catholic convent schools in India, St. Aloysius School, which is now 137 years old. The motto of his “Alma Mater” was "VIRTUS ARDUO" which means “virtue in hard work”. Sid attended University of Georgia in the PHD Economics program, Athens, Georgia, initially in the USA. Later, in 1989, he transferred to an Ecumenical "Master in Religious Education" Program at Barry Town, New York for personal and spiritual enrichment.
In his spare time, Sid has participated in numerous summer or winter, Inter-Faith, Cultural, Rebuilding and Community Service programs on three Continents, Asia, Europe and United States. On a local basis, Sid volunteers his spare time at a Community Center in Sunnyvale and the local Silicon Valley Real Estate Community. Sid was a Junior Table Tennis and Badminton Champion, has coached and sponsored - Little League Baseball and National Youth Sports Basketball, and enjoys sports. He is married and has two boys. He lives in Monte Sereno (Los Gatos), CA and has been a Northern California bay area resident since 1991. Both, he and his wife became PROUD American Citizens in 2003. Sid is a Freethinker, Free Spirit, and a Registered Independent.
MoneyMallUSA Corporation was founded by Sid Jain in 1999. Currently, their Broker-Dealer is Emerson Equity, LLC, San Mateo. Sid Jain’s current Real Estate Broker is Mr. Joe Atab, First City Bancorp Mortgage, Inc. They are Licensed, Bonded and Insured. Average Financial and Real Estate Industry experience of their 1031 exchange Qualified Intermediaries (a.k.a Accommodators), Registered Representatives and Property Providers a.k.a. Sponsors, Securities Broker-Dealer and Real Estate Broker is at least 10 years each. On a combined experience basis, that experience is well over 500 years, including people in the Sponsor’s home office. They are regulated by Federal and State Securities laws, through SEC, NASD, State Agencies, and in some states through the Department of Real Estate.
Sid is also regulated by the DRE, since he voluntarily obtained the Sales Person License for Real Estate (Non-Securities) transactions. Sid Jain and/or MoneyMallUSA Corporation is a member of NASD (registered rep.), Member of California DRE (as salesperson), Member-Financial Planning Association, past member of NAIFA (National Association of Insurance and Financial Advisors), Member and Sponsor of COIAR (Council of Indian American Realtors), Member-CA Department of Corporations, Member, Nevada Department of Corporations, Member, Tenant In Common Association (TICA), Member, CA Apartment Association, and a member/contributor of numerous environmental, conservation, cultural, service and charitable organizations worldwide.
MoneyMallUSA Corporation is a 1031 exchange, Tenant in Common (replacement) property* Broker. The minimum net worth of any client accepted into the TIC 1031 PROGRAM (considered securities even though it is Real Property) is $1 Million with a minimum investment of $350,000. Each investor or SPE (Special Purpose Entity) has to be an Accredited Investor with net worth for SPE's at $5,000,000. Their Advertisements run in Commercial and Residential Magazine, California Apartment Association website and member magazine, Los Gatos Weekly Times, Saratoga News and online on a weekly basis for 1031 exchange replacement properties. Please visit Item A and Exhibits in the “About Us” section on their website at http://www.mymoneymall.com for additional 1031 information. You can reach them at 408-836-3858 or sidjain@mymoneymall.com.
SID JAIN, President
MONEYMALLUSA CORPORATION
A Financial Services Company
sidjain@mymoneymall.com
(408) 836-3858
Biography
Sid’s personal experience in the Financial Services Industry is 18+ years in the USA. Prior to that he worked for four years in India, where he worked with Reliance Industries in their Retail Marketing Division, creating fabric showrooms and handled Financial Instruments, raising money for the company. He holds MA Economics from University of Jabalpur (Now RD University) and BA Economics and Math, from St. Aloysius College. He was educated from Grade K through High School, at one of the finest, private catholic convent schools in India, St. Aloysius School, which is now 137 years old. The motto of his “Alma Mater” was "VIRTUS ARDUO" which means “virtue in hard work”. Sid attended University of Georgia in the PHD Economics program, Athens, Georgia, initially in the USA. Later, in 1989, he transferred to an Ecumenical "Master in Religious Education" Program at Barry Town, New York for personal and spiritual enrichment.
In his spare time, Sid has participated in numerous summer or winter, Inter-Faith, Cultural, Rebuilding and Community Service programs on three Continents, Asia, Europe and United States. On a local basis, Sid volunteers his spare time at a Community Center in Sunnyvale and the local Silicon Valley Real Estate Community. Sid was a Junior Table Tennis and Badminton Champion, has coached and sponsored - Little League Baseball and National Youth Sports Basketball, and enjoys sports. He is married and has two boys. He lives in Monte Sereno (Los Gatos), CA and has been a Northern California bay area resident since 1991. Both, he and his wife became PROUD American Citizens in 2003. Sid is a Freethinker, Free Spirit, and a Registered Independent.
MoneyMallUSA Corporation was founded by Sid Jain in 1999. Currently, their Broker-Dealer is Emerson Equity, LLC, San Mateo. Sid Jain’s current Real Estate Broker is Mr. Joe Atab, First City Bancorp Mortgage, Inc. They are Licensed, Bonded and Insured. Average Financial and Real Estate Industry experience of their 1031 exchange Qualified Intermediaries (a.k.a Accommodators), Registered Representatives and Property Providers a.k.a. Sponsors, Securities Broker-Dealer and Real Estate Broker is at least 10 years each. On a combined experience basis, that experience is well over 500 years, including people in the Sponsor’s home office. They are regulated by Federal and State Securities laws, through SEC, NASD, State Agencies, and in some states through the Department of Real Estate.
Sid is also regulated by the DRE, since he voluntarily obtained the Sales Person License for Real Estate (Non-Securities) transactions. Sid Jain and/or MoneyMallUSA Corporation is a member of NASD (registered rep.), Member of California DRE (as salesperson), Member-Financial Planning Association, past member of NAIFA (National Association of Insurance and Financial Advisors), Member and Sponsor of COIAR (Council of Indian American Realtors), Member-CA Department of Corporations, Member, Nevada Department of Corporations, Member, Tenant In Common Association (TICA), Member, CA Apartment Association, and a member/contributor of numerous environmental, conservation, cultural, service and charitable organizations worldwide.
MoneyMallUSA Corporation is a 1031 exchange, Tenant in Common (replacement) property* Broker. The minimum net worth of any client accepted into the TIC 1031 PROGRAM (considered securities even though it is Real Property) is $1 Million with a minimum investment of $350,000. Each investor or SPE (Special Purpose Entity) has to be an Accredited Investor with net worth for SPE's at $5,000,000. Their Advertisements run in Commercial and Residential Magazine, California Apartment Association website and member magazine, Los Gatos Weekly Times, Saratoga News and online on a weekly basis for 1031 exchange replacement properties. Please visit Item A and Exhibits in the “About Us” section on their website at http://www.mymoneymall.com for additional 1031 information. You can reach them at 408-836-3858 or sidjain@mymoneymall.com.
SID JAIN, President
MONEYMALLUSA CORPORATION
A Financial Services Company
sidjain@mymoneymall.com
(408) 836-3858
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