1031 exchanges: An Attorney's Point of View: The VALUE of a GOOD Buyer's and Seller's Agent - Why You Need One!
- 07/03/08 06:34 AM
[REVISION 7/4/08 (original post 7/3/08): The purpose of this post is to educate the public regarding the value a GOOD agent will bring to the transaction, why their fees are justified and how to find a GOOD agent] Over the past few days there has been a HEATED ongoing debate regarding whether agents and in particular, listing agents are worth their commission (here's a link to the Member's Only version of this post with links to the debate). Since I don't have a horse in this race i.e., I am not a realtor nor am I someone promoting an investment business model that … (8 comments)
On May 22, 2008, Congress enacted the Food, Conservation and Energy Act of 2008 which is often referred to as the Farm Bill. Among other things, the Act amends IRC Section 1031(a)(2)(B) to exclude mutual ditch, reservoir or irrigation company stock from the definition of "stock." As a result, mutual ditch, reservoir or irrigation company stock should now be eligible in §1031 exchanges. In order to qualify for this treatment, the new law requires that ditch stock must be treated as an interest in real property under the law of the state in … (3 comments)
1031 exchanges: Re-Post - The Difference Between the Mortgage Forgiveness Debt Relief Act of 2007 and State Anti-Deficiency Laws
- 06/26/08 02:23 PM
A week or so ago, I wrote a post detailing the Mortgage Forgiveness Debt Relief Act of 2007 (MFDRA) because I'd read a number of posts where the authors confused the MFDRA with their state's anti-deficiency laws. That post was lost when AR timed out on me when I went to publish the post. If you want to get the information from the horse's mouth (the IRS) here's a link to the IRS publication regarding the MFDRA. I'm summarizing it below. The main difference between MFDRA is who is providing the protection. MFDRA is federal law and applies to your federal … (12 comments)
1031 exchanges: Silver Complex Firefighters Could Use Donations of Supplies - How You Can Help!
- 06/26/08 12:23 PM
I recently received an email from the Yosemite Gateway Association of Realtors indicating that the firefighters who have been fighting the Silver Complex fires could use donations for incidental supplies to make them more comfortable while they are protecting our homes and forests. If you are interested in providing these types of donations, please see below. Century 21 Ditton Realty is taking donations for the fire crews. They have food and water but they need travel sized toiletries such as soap, razors, cleansing clothes, visine, vasoline, Kleenex, toothbrushes and toothpaste, deodorant, chapstick, etc. They can drop it off … (0 comments)
Three fires are located northwest of the town of Oakhurst, south of Fish Camp, just south of Ponderosa Basin, and in the Timber Loft area. Fire suppression efforts are concentrating on the Oliver Fire containment and the protection of the Ponderosa Basin structures. The Oliver Fire has been turned over to CAL FIRE. Additional fire resources have arrived and are on the fire lines. One other fire is located in the Star Lakes area … (4 comments)
1031 exchanges: 1031 EXCHANGES MAY BENEFIT INVESTORS FACING FORECLOSURE
- 06/26/08 11:32 AM
I know it sounds weird but it could help an investor in a very specific set of circumstances. In the last post we examined the options available for taxpayers who had debt forgiven or canceled on their principal residence. But what about those who own investment property who are facing a short sale or foreclosure? Are there tax consequences when debt is forgiven or canceled on those types of properties? You bet! Given the challenging conditions in the real estate market, some taxpayers may be faced with the prospect of foreclosure or a short sale arrangement with their lender. Taxpayers … (8 comments)
1031 exchanges: The Difference Between the Mortgage Forgiveness Debt Relief Act of 2007 and State Anti-Deficiency Laws
- 06/26/08 09:42 AM
A week or so ago, I wrote a post detailing the Mortgage Forgiveness Debt Relief Act of 2007 (MFDRA) because I'd read a number of posts where the authors confused the MFDRA with their state's anti-deficiency laws. That post was lost when AR timed out on me when I went to publish the post. If you want to get the information from the horse's mouth (the IRS) here's a link to the IRS publication regarding the MFDRA. I'm summarizing it below. The main difference between MFDRA is who is providing the protection. MFDRA is federal law and applies to your federal income … (7 comments)
This issue has come up twice this week. Once on an AR blog and once in the course of my business. So here you go. . . When a client selects a Qualified Intermediary (QI, accommodator, facilitator) and decides to open an exchange account a number of contractual things need to happen before the QI is ready to accept the clients funds from the sale of the property. 1. The Seller (client/taxpayer) will sign an exchange agreement, which essentially prevents them from having the ability to pledge, borrow or otherwise receive the benefits of the sale proceeds during the exchange period … (10 comments)
Well, remember that when a taxpayer engages in a 1031 Tax Deferred Exchange (selling investment property and exchanging into a new investment property) they are DEFERRING the capital gain tax that would normally be recognized on the sale. What does Deferral mean? It means that the basis of the Replacement Property is reduced by the amount of Capital Gain that was deferred on the sale of the Relinquished Property resulting in a … (4 comments)
Well, remember that when a taxpayer engages in a 1031 Tax Deferred Exchange (selling investment property and exchanging into a new investment property) they are DEFERRING the capital gain tax that would normally be recognized on the sale. What does Deferral mean? It means that the basis of the Replacement Property is reduced by the amount of Capital Gain that was deferred on the sale of the Relinquished Property resulting in a … (6 comments)
Are you blaming it on the market? Are you sure it's the market and NOT your telephone policy? Don't miss Part 2 in the series. Clients and Agents Biggest Pet Peeve . . . Is the failure to receive a timely return phone call. Attorneys, CPAs and real estate agents run a tie with being the worst at returning phone calls. Have you ever been frustrated because another professional does not return your phone call? Are you ever … (13 comments)
FRONT OFFICE PERSONNEL Are they Performing? If the person answering your office phone is unprofessional, discourteous, incompetent or apathetic, you could be losing business. A great way to find out what it sounds like to call your office, is to have friends call for you and give you feedback. Ask them to leave a message. How long does it take for you to receive the message? This is a critical link in connecting with your clients. … (2 comments)
Are you blaming it on the market? Are you sure it's the market and NOT your telephone policy? Don't miss Part 2 in the series. Clients and Agents Biggest Pet Peeve . . . Is the failure to receive a timely return phone call. Attorneys, CPAs and real estate agents run a tie with being the worst at returning phone calls. Have you ever been frustrated because another professional does not return your phone call? Are you ever … (6 comments)
1031 exchanges: 1031 Exchanges - Thinking About Investing In Real Estate With Other People? Read this First!
- 05/16/08 07:27 AM
Partnerships V. Co-Ownership Many investors consider asking other investors to join them in the purchase of an investment property. This arrangement can be very beneficial because it gives the parties the opportunity to invest in property they may not have been able to afford on their own and it spreads the risks and costs out. They are a couple things to consider when contemplating a co-investing arrangement. Are you going to be a true partnership or are you going to be co-owners. This seems like a relatively minor distinction until you look at the big picture.
Partnerships Remember, that partners … (10 comments)
1031 exchanges: 1031 Exchanges - Can You Convert A Rental Into A Residence?
- 05/15/08 05:59 PM
"MANY TAXPAYERS CAN TAKE ADVANTAGE OF TWO TAX CODE SECTIONS" After the Q & A, I thought I write a summary of the current state of rentals and residences and converting them. Here are some of the issues to review with the tax advisor when considering converting an investment property to a primary residence. It's very important to review these issues, especially, if the property was purchased as replacement property in a 1031 exchange. Click here for a real life question and answer regarding converting a rental to a residence.
… (8 comments)
1031 exchanges: 1031 Exhanges - REAL LIFE Q & A - RE: How Long Before I Can Move In?
- 05/15/08 05:48 PM
REAL LIFE QUESTION AND ANSWERS Today, I received a question from a reader of my blog. It is a very common question, so I thought I'd give you both the actual question and my answer. All identifying information has been removed. Click here for more formal information regarding converting a rental to a residence. Dear Lisa: After reading your column a question has come up no one seems to know the answer to. We made a 1031 exchange from rental for rental . do you know how long we must rent it out for before we can move into it as … (0 comments)
1031 exchanges: PHONE/EMAIL SCAM RE: IRS Economic Stimulus
- 05/14/08 05:26 PM
Please Alert Your Clients to This Scam I received this email today purporting to be from the IRS regarding collecting my IRS Economic Stimulus Rebate. It is a scam. Note that the link listed does not even include www.irs.gov. I apologize for the poor resolution of the screen shot. (I'm still learning how to efficiently insert screen shots into my blog) Please feel free to leave me any tips.
Below is what the IRS has to say about this scam (I excerpted the relevant information from the IRS website but there were several variations on this scam that the IRS … (6 comments)
1031 exchanges: 1031 Exchanges - Earthquake Preparedness
- 05/10/08 04:05 PM
U.S. Geological Service Issues Report on California They reported that there is a 99% chance that California will experience a 6.0+ earthquake in the next 30 years. Southern California's has a slightly higher chance for a large scale earthquake than northern California. What that means is that every family needs to have a "plan." That plan should include contingencies for communicating their status (arrange for someone out of state to be your contact person). It's critical that each person have an emergency kit in their car that includes comfortable walking shoes, water, flashlight, batteries,thermal blanket, jacket, first aid kit and snacks that … (2 comments)
1031 exchanges: Fresno Association of Realtors Golf Tournament
- 05/10/08 03:54 PM
Last Wednesday - Great Tournament A full complement of golfers took to the links at Riverbend Golf Course to participate in the Annual FAR Golf Tournament. Many affiliates developed creative themes for the holes they sponsored. Asset Preservation, Inc. sponsored Hole Number 12, where we served Montana Amazon drinks and salami and cheese. We wanted to offer something different from the usual fare of candy and other sweet goodies. The tournament proceeded smooth without any big gaps between the teams. The Tournament was followed by a lively lunch and raffle. All in all, everyone had a great time. … (2 comments)
1031 exchanges: 1031 Exchanges - LLCs & Partnerships
- 05/10/08 03:41 PM
It's Important Who Drafts the Operating Agreement and Partnership Agreement Recently, I was called by a former client who was concerned because he was the managing member of an LLC that had done a multiple property exchange. One of the other members, an attorney, had drafted the LLC's Operating Agreement (the document the defines the repsonsibilities of the members and who has the authority to bind the LLC). The attorney member had purchased authorized the release of funds for the purchase of Property A (the managing member was not aware of this purchase until after it had been completed). Subsequently, the … (4 comments)
Discussing 1031 Exchange Issues and Related Real Estate Issues in California. Specifically focusing on the Merced, Madera, Fresno, Selma, Reedley, Oakhurst,Visalia, Hanford, Porterville and Bakersfield areas.
[REVISION 7/4/08 (original post 7/3/08): The purpose of this post is to educate the public regarding the value a GOOD agent will bring to the transaction, why their fees are justified and how to find a GOOD agent]
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