Gift Limit Increased by IRS for 2013

Taxpayers are allowed to "gift" real estate, personal property and/or money to other individuals without having to pay any kind of corresponding taxes because of the gift provided the taxpayer follows certain gift limitations set forth by the Internal Revenue Service. 

Annual and Lifetime Gift Limits

The are two (2) different types of gift limitations.  There is the annual gift limitation and there is the lifetime gift limitation.  These limits are established by Congress and administered by the Internal Revenue Service. 

Annual Gift Limit Increased for 2013

The annual gift limit is set annually by the Internal Revenue Service pursuant to a formula pre-established by Congress.  The Internal Revenue Service just announced that the Annual Gift Limit for 2013 has been increased to $14,000.00 (it was $13,000.00 for 2012).

Tax Benefits of a 1031 Exchange Should Not Overshadow Financial Benefits

Real estate investors frequently jump into acquisitions of replacement real property as part of their 1031 Exchange transaction, and that may not be well suited for their investment goals and objectives.  The rush into these investments is certainly understandable due to the stress placed on the investor due to the 1031 Exchange deadlines involved.

Tax Benefits Should Not Guide Investment Decision

However, while the tax benefits related to structuring the 1031 Exchange are certainly important, the financial and economic elements of a replacement real property should not be ignored simply because of the 1031 Exchange identification and completion deadlines. 

Real estate investors should let the economics of the replacement real property guide their final investment decision instead of making their decision based solely on the income tax benefits involved by 1031 Exchanging into another replacement property.

Delaware Statutory Trusts

Delaware Statutory Trusts, also referred to as DSTs, can also provide another investment vehicle for real estate investors to consider.  The more options the real estate investor has at their disposal the more likely he or she will find the most suitable investment for their 1031 Exchange and not be forced into "jumping" into the wrong investment.