TEE-Shots Newsletter

Mon
08
Jan

When to do a REVERSE exchange...

NOW may be a perfect time to do a reverse exchange...

When the real estate market is a buyer's market, it may be a great time to buy but a lousy time to sell. One of the challenges in a buyer's market is also trying to do a 1031 exchange -- because you have to both sell and buy to accomplish a like-kind exchange -- otherwise you have to pay the capital gains tax. So the very nature of a buyer's market tends to cancel out the positive effects of an exchange.

Mon
04
Dec

Won't I have to pay taxes eventually anyway...?

Many people ask the question, "Won't I still have to pay the capital gain taxes on my property when I eventually sell it? So what is the difference if I pay them now or later?"

Mon
16
Oct

Land for land and the "Like-Kind" rule...

Does a Fix-and-Flip property qualify for a 1031 Exchange...?

Generally, fix-and-flips do not qualify for a 1031 Exchange. The reason they don’t qualify is that typically people plan on selling a fix-and-flip as soon as the improvements are finished.

In the upcoming book, Rich Dad's Real Estate Advantages: Tax and Legal Secrets of Successful Real Estate Investors (Warner, Paperback), Gary Gorman writes,

Mon
02
Oct

If I follow the 1031 rules, can they disallow my exchange...?

If I follow all the 1031 rules, can the IRS still disallow my exchange...?

This should never happen, although a renegade auditor can do almost anything he wants. But if this were to happen, his superiors should quickly reverse his decision. That's because IRC §1031 is not a loophole, or a procedure that gets around a law. IT IS THE LAW; it is section 1031 in the Internal Revenue Code.

Mon
18
Sep

Can you 1031 exchange condemned property...?

The answer is a definitive NO. You cannot do a 1031 Exchange. However, you can do a 1033 Exchange! Section 1033 of the Tax Code addresses condemnations and "involuntary conversions" of property.

Mon
28
Aug

Exchanger STILL Beware: QI faces multiple charges...

CBS4 News in Denver, CO, reported Friday on the indictment of a Qualified Intermediary who conspired with two others to bilk investors out of millions of dollars in an elaborate real estate investing scam. He is charged with 11 counts of securities fraud and 12 counts of theft. He had been previously convicted of other felonies.

So how did this QI get qualified? Quite simply, the 1031 exchange industry is completely unregulated. Anyone can print business cards and call himself a "Qualified Intermediary."

Mon
07
Aug

The role of TICs in a 1031 Exchange...

TICs (rhymes with 'sticks') offer small real estate investors the opportunity to participate in big real estate projects. TIC investments (Tenant-In-Common) are like buying pizza by the slice; you're buying a slice of institutional-sized real estate instead of having to buy the whole thing.

Mon
26
Jun

Effective Real Estate Investing Partnership...

What to do if you don't have an agreement in place (when you know that you really should)

By Peter Conti, www.resultsnow.com

Mon
15
May

Where does the term "boot" come from...?

Boot is the term used by the IRS and tax professionals when they talk about the taxable portion of a 1031 exchange. But where does it come from?--it's not defined anywhere in the internal revenue code, or in any court cases.

Mon
24
Apr

Can you spot a fraudulent QI...?

You've sold your purple duplex and you want to do a 1031 exchange. When it's time to pick your intermediary, how do you know if the intermediary has previously been convicted of fraud? At least one has! Can you tell if the intermediary is daytrading with their client's money? Several have! Could the intermediary get on an airplane with your money and disappear? Several have!

The answer is no -- you cannot tell from talking to them, or meeting them in person. And there is no agency that is dedicated to protecting you.

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