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Introduction
of Gary Gorman - Not a "How to do it" class,
but a "What's new," "What's the latest thing
in §1031," "What's coming up" class -
Handouts: 1. Notes;
2-4. articles - New ruling in 2002: Tenant-in-common
transactions, or "TICs" - TIC rules cover
35 or fewer people who don't know each other
- People who are being sold their interest
by a sponsor or a promoter or a developer,
etc. - These rules do not cover people who
are friends that buy property together - What
if the person isn't somebody that you know
personally, but somebody that you have heard
of? |
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Does
this cover REITs? - (What are "REITs"?) -
"a Cookbook ruling;" a "revenue procedure;"
or "Rev Proc:" the IRS's guarantee - Does
it qualify for 1031 or not? - How many different
rules do you need to meet to qualify for a
1031 exchange? - Search on Google under the
term "Tenant-in-common" yields how many hits?
- How many of those are sponsors or people
selling TIC programs? - How many are any good?
- In the 2 years since the procedure was allowed,
how many were approved by the IRS? - What
one thing was approved? |
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"Some
of the things that I've seen..." - Do your
due-diligence! - A $12.5 million product marketed
at $18 million - Are there NO good TIC deals
out there? - A question that often comes up:
"Can you, the Realtor, get a commission for
referring your client to a TIC sponsor or
TIC seller?" - If Fred Jones calls the TIC
provider directly, do you the Realtor get
a commission? - What is it that the TIC salesman
is selling? Real estate? Or a security? -
How many specialists in this area say real
estate? How many say security? - Series 7
license. |
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A
recent Supreme Court case: what did they rule?
- What if you're a principle? - What if a
Realtor finds a building that she wants to
buy, but she's $2million short, can she bring
some other people in? - What if you have no
connection with the others except through
"Sam Seller" that you hired to sell the other
$2 million? - What exactly are we talking
about? Fred Jones wants to invest $1million
into a $100million dollar building and the
other $99 million is being bought by other
people - Is it a "like-kind" exchange? -
At what point in the transaction do you get
the IRS determination? |
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Does
this mean there are NO good TIC deals out
there? - You as Realtors must do your job!
- In the 2 years since the IRS opened the
gates and allowed this, how many TIC companies
applied for and were approved for 1031 treatment?
- What percentage of these deals are "winging
it"? - "There was a court case that came out
just recently..." What happens to the money
if an Intermediary goes bankrupt? |
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What
percentage of Intermediaries put the money
in commingled accounts? - Can you MAKE your
QI put the money in a segregated account?
- If not, can you change Intermediaries? -
If the Intermediary has a trust account, would
that be protected? - In a 1031 exchange, what
happens technically? - The technical difference
between a Realtor's escrow account and a QI's
exchange account - Be Smart! Make sure that
all that money goes into separate, segregated
accounts; ABSOLUTELY CRITICAL!!! - The Nebraska
QI and ENRON. |
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The
Intermediary in Hawaii and his personal account
in Hong Kong - Fred and Sue Jones are selling
3 properties in 3 separate exchanges: one
account or three separate accounts? - What
is 1031Accesssm? - Selling 3 and buying one:
does the 180-day clock start ticking after
the sale of the 1st property? - List your
"dogs" first! |
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How
to solve the 3-property problem with a reverse
exchange - What is a reverse exchange? - how
does it work? - Why are reverse exchanges
expensive? - What happened to the QI in Minnesota?
- What happened to the Hawaii QI? - Are there
rules or regs for QIs? |
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Should
the states or government legislate QIs? -
Are all QIs bonded? - How many QIs are there?
- What percentage of those is bonded? - How
do you know? - Does the insurance company
require segregated accounts? - What happens
to the bank interest? - Why do QIs commingle
accounts? - How is the interest handled at
the end? - Are you taxed on the interest? |
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"Way
back in 1951..." the landmark case "Bloomberg
Coca-cola vs. Commissioner" - What if it's
a separate business? - Why did it change last
year? - Build-to-suit transactions - How do
you do that? |
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Can
Fred Jones sell 4 properties and roll them
into the construction of a nice building on
another piece of land provided that it happens
within 180 days? - if you own a piece of bare
land, can you sell it to a relative, buy back
part of it, then sell a separate piece of
property, and roll those funds through a 1031
exchange? - If the building isn't completed
win a 180 days due to not your fault, what
happens? - |
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Construction
exchanges and EATs - Can Jones Investments,
LLC, also be the contractor that builds the
building? - What if Fred owns a concrete finishing
business and he does the concrete work can
he subcontract the other parts of it? - What
instrument is used to transfer ownership of
the EAT to Jones? - The legal document called
the Option. |
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If
Fred has already started construction of his
building can a 1031 be done midstream? - Do
lease rates have to be Fair Market Value?
- Hot Topics: What's hot with the IRS right
now? - Related party rules - Who is "related"? |
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LLCs,
Corporations and Partnerships: are they "related"
to you? - What about estates? - Hot Topic
number 2: Qualified Intermediaries - What
can happen if I change my 45 day form (after
the 45th day)? - Interplay with §121
- "The Joint Committee of Congress is talking
about changing the rule..." |
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Conclusion. |
