Real estate investors interested in enjoying the tax benefits of a like-kind exchange may consider a “reverse exchange.” In a reverse exchange, the replacement property is acquired before the investor transfers the relinquished property. While the tax code does not allow an exchanger to exchange into a property already owned, a reverse exchange allows an exchanger to secure the replacement property prior to the sale of the original property. These transactions are more complex than a standard 1031 exchange and come with certain advantages and disadvantages.
One of the most vexing concerns investors have when buying real estate is whether they will end up being saddled with unexpected liabilities or obligations related to the property. When it comes to commercial lease obligations, though, there is very little a real estate investor can do without the tenant’s consent, and the resulting costs… Continue reading »
Since the real estate market crash, commercial mortgages have been more difficult to obtain. Lenders do not want to expose themselves to the types of losses they have sustained over the last several years and therefore, have become even more critical in evaluating the credibility of potential borrowers and the types of projects they will be financing.
If you rent property to one of your own businesses, you may accidentally catch the eye of the IRS. Although rental real estate properties are generally treated as passive activities, the self-rental rules may recharacterize the rental income as nonpassive in some cases. That is exactly what happened to one investor who leased property to his wholly-owned S corporation.
Several options are available for giving real estate to charity. Each option can produce a charitable tax deduction and help avoid taxes. Some options could even leave the donor with an income stream for a period of time. This article takes a look at outright gifts, bequests, charitable remainder trusts and “bargain sales.”
With proper tax structuring, it is possible to turn a vacation home into a tax benefit. If you own a second residence located in a resort location, a knowledgable tax professional may be able to help improve the overall economic performance of the property.
In December, 2011, the IRS issued temporary regulations intended to set new standards for capitalizing or deducting dollars spent on tangible property. These regulations were originally effective for years beginning on or after January 1, 2012, but the effective date has been postponed to tax years beginning on or after January 1, 2014. Taxpayers have the option to apply the temporary regulations to tax years beginning on or after January 1, 2012.
If you own real estate that generates income, you could be paying an additional 3.8% net investment income tax (NIIT) which goes into effect in 2013. For the sake of discussion, let’s assume that your adjusted gross income (AGI) is over the relevant threshold ($250,000 in the case of a married couple filing jointly). Even if your AGI is generally low, there may come a year when you sell property, giving you a high adjusted gross income and significant income subject to NIIT in that year. Is there any tax planning that can be done to offset the NIIT?
The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working together to develop a new approach to lease accounting. Potential changes to lease accounting have been debated for years and to-date these changes remain undecided:
The Chicagoland rental market continues to thrive and new players are entering the multi-family game every day, either by acquiring rental properties from banks through foreclosure or taking advantage of the low interest rates.