To qualify, most exchanges must merely be of like-kind—an enigmatic phrase that doesn’t mean what you think it means. You can exchange an apartment building for raw land or a ranch for a strip mall. The rules are surprisingly liberal. You can even exchange one business for another, but...
A 1031 exchange, also known as a “1031 tax deferred exchange,” is a powerful tool under theU.S. tax code. In short, it allows real estate investors to swap one investment property for another. The main benefit is that it permits the investor to defer paying capital gains taxes on the...
In life insurance, assignment means the transfer of interest in the policy to someone other than the policyholder. For example, a person could take out a life insurance policy on their own life and assign some of the benefits to a relative. In that circumstance, the policyholder becomes the ...
your depreciation remains based on the original property. That generally means lower depreciation for your tax bill each year than you’d have been able to take if you’d bought the replacement property without a 1031 exchange.
We often get questions about spouses, how the title of property is held and their affect on a 1031 exchange. Learn what a community property state is and what it means for your 1031 exchange in this video.We often get questions about spouses, how the title of property is held and their...
Electronic Data Interchangeis often abbreviated as EDI. It is a technique under which messages are transferred through electronic means from one... Learn more about this topic: Electronic Data Interchange and the Transfer of Transactional Information ...
To calculate rental income, investors must first learn to classify what it is. To be clear, rental income is “any payment you receive for the use or occupation of property,” according to the Internal Revenue Service (IRS). That means rental income includes payments received from tenants (ob...
In commercial leasing, there are usually fewer laws governing the lessee/lessor relationship, which means fewer protections. In addition, commercial leases tend to have much longer terms than residential leases, which may add to the investor’s risk. ...
Real estate investors who are just getting started can also use more passive means like REITs, which are essentially mutual funds that hold real estate investments. These are basically hands-off investments but usually generate the lowest returns with the fewest incidental advantages. ...
Inflation Hedge In periods of inflation, the cost of living and the price of goods and services increase. Fortunately, commercial real estate often acts as a hedge against inflation. As the cost of living increases, so too does the cost of rent, which means investors may see an increase in...