iowa section 1031: Tell Me About My Money that the Intermediary Holds During an Exchange - 07/24/08 12:08 PM
First let's discuss the earnings that your account generates while it is in the care of the intermediary. Did you know that many intermediary services earn the majority of their income from the interest that your account generates for them while they hold it!? By paying their clients little or no … (7 comments)
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iowa section 1031: Demystifying the Reverse Exchange - 07/24/08 11:40 AM
Reverse exchanges are gaining in popularity, but they are often misunderstood and they can be confusing. Let's investigate the basics of this exchange structure.
Sometimes a situation arises in which an investor or property owner wants to purchase a property but wishes to sell a property that he or she already … (2 comments)
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iowa section 1031: The Farm Bill Does Not Alter the Definition of “Like-Kind” in Regards to Section 1031 Exchanges - 06/23/08 04:35 PM
In order to clarify things in the mind of anyone who is uncertain about it, the farm bill that was passed by Congress does not include the language about like-kind status that those of us in the exchange industry were concerned about. The Senate version of the bill sought to redefine … (0 comments)
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iowa section 1031: The Presidential Election and the Potential for Change in Capital Gain Rates - 06/04/08 08:07 PM
Now that things look to be settled on the Democratic side of things, how do the two candidates look at the current capital gain tax rates? Both candidates seem to be focused on “change” at the moment; does that extend to the capital gain tax rate?
The presumptive nominee on the … (6 comments)
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iowa section 1031: Merely the Form of the Investment Changes… - 05/19/08 03:33 PM
One of my favorite explanations for why the Internal Revenue Service allows taxpayers to sell a property and defer the capital gain tax on the sale of that property through the use of a Section 1031 like-kind exchange contains the words in the subject of this article.
The explanation goes like … (0 comments)
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iowa section 1031: Are Your Income Properties a Business, an Investment, or Both? - 05/16/08 04:10 PM
Are your income properties a business, an investment, or both? I suspect most property owners would say they are both. That’s how I feel about mine. They certainly qualify as a business, but the primary reason I bought them was as an investment for the future.
Why does this matter? Because … (8 comments)
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iowa section 1031: Section 1031 Exchanges - Tax-Deferred or Tax-Free? - 05/02/08 12:14 PM
Did you know that after you use a Section 1031 exchange to acquire new property, you will face the same tax-related issues when you decide to sell that property? Is there any way around paying capital gain taxes when you sell your property? With the issuance of Rev. Proc. 2008-16 and … (2 comments)
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iowa section 1031: Iowa Landlord Association Event on 4/17/08 - 04/16/08 03:24 PM
On April 17, 2008, the Iowa Landlord Association will sponsor the 2008 Spring Educational Seminar and Trade Show at the downtown Holiday Inn, 1050 6th Avenue, in Des Moines. The event starts at 8:00 A.M. and runs until 3:30 P.M. The speakers and their subjects are as follows:
Dave Sollenbarger, … (0 comments)
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iowa section 1031: IRS Subtly Encourages Compliance – An Example - 04/06/08 06:35 PM
A few weeks back, the Internal Revenue Service and the Tax Division of the Justice Department took action to encourage potential exchangers to comply with the rules of Section 1031. (In reality, the IRS had little choice given the blatant fraud that was allegedly perpetrated.) A gentleman named William Franklin Jones … (6 comments)
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iowa section 1031: Ways to Increase Your Return on Equity - 04/04/08 04:48 PM
This is a follow-up to a posting written yesterday about Return on Equity. In that blog, I promised to return to offer solutions for increasing the investor’s Return on Equity, and that is the subject of this post.
Please check out yesterday’s blog if you have any question about what … (0 comments)
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iowa section 1031: Return on Equity - 04/03/08 05:08 PM
Return on Equity is the subject today. In an earlier blog, I promised to get back to the ideas that were presented last Saturday at the Omaha Landlord Association’s event that featured Tom Lundstedt, “the funniest investment and tax guy in America.” The crux of what I took out of … (0 comments)
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iowa section 1031: Omaha Landlord Association Event, March 29, 2008 - 03/30/08 08:33 PM
Last Saturday, March 29, 2008, the Omaha Landlord Association put on a great event. The day featured speaker Tom Lundstedt (www.tomlundstedt.com), who is billed as “the funniest investment and tax guy in America!” Based on my experience on Saturday, if he is not the funniest, I don’t know who is. … (0 comments)
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iowa section 1031: Iowa Land Price Survey Shows 12% Rise in Six Months - 03/25/08 02:29 PM
A recent survey of farmland real estate brokers shows that the price of Iowa’s best farmland rose by an average of 12 percent from September 2007 through February 2008. This survey was conducted by the Iowa Farm and Land Chapter 2 Realtors Land Institute, as it has been done every … (3 comments)
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iowa section 1031: Two Rivers Real Estate Investor’s Association Meeting - 03/14/08 03:21 PM
I have been honored with an invitation to speak at the Two Rivers Real Estate Investor’s Association monthly meeting on Wednesday, March 19, 2008. The meeting will be held at the Agribusiness of Iowa Building, 900 Des Moines Street, Des Moines, IA, from 6:00 pm to 7:30 pm. Click for … (4 comments)
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iowa section 1031: New IRS Summary Publication on Tax-Deferred Exchanges - 03/10/08 03:51 PM
Recently, the Internal Revenue Service put out a nice little summary of Section 1031 like-kind, tax-deferred exchanges. “FS-2008-18” (FS = Fact Sheet) does a great job of summarizing the requirements, pitfalls, and advantages of like-kind exchanges.
The article starts off by observing that generally the seller of business or investment … (2 comments)
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iowa section 1031: Free Spreadsheet to Learn Why Your Clients Should Consider a Tax-Deferred Exchange - 03/07/08 03:49 PM
Do you want an easy way to learn why you and your clients should consider a Section 1031 tax-deferred exchange? Over the past few weeks, I have been fine-tuning a couple of Buy and Hold vs. Buy and Exchange Spreadsheets. I think they are finally ready for prime-time, so I … (31 comments)
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iowa section 1031: Midwest Farmland Prices Increased an Average of 16% in 2007 - 03/04/08 04:38 PM
Midwest farmland prices increased an average of 16% in 2007, according to the Chicago Federal Reserve Bank’s annual survey of agricultural lenders. The 7th Federal Reserve District that is based in Chicago consists of all of Iowa and half or more of four other states: Michigan, Wisconsin, Indiana, and Illinois. … (7 comments)
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iowa section 1031: Guidance on the Exchange of Vacation Homes via Rev. Proc. 2008-16 - 02/20/08 11:59 AM
Guidance on the exchange of vacation homes via Revenue Procedure 2008-16 was provided recently by the Internal Revenue Service. This procedure was brought about as a result of last year’s case in Tax Court Moore v. Commissioner, (T.C. Memo 2007-134) and a subsequent report by the Treasury Inspector General for … (6 comments)
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iowa section 1031: Iowa Land Investment Expo—a Most Excellent Event - 02/19/08 08:35 PM
The first Iowa Land Investment Expo was held in West Des Moines, Iowa, last Friday, February 15, 2008, at the West Des Moines Marriott. The event brought together a diverse group of investors, farmers, exhibitors and others.
The day started off with a discussion between Don DeWaay of DeWaay … (7 comments)
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iowa section 1031: Today’s Farm Bill / Section 1031 Update - 02/15/08 08:39 PM
Today’s Farm Bill / Section 1031 update has to do with comments made today at the Iowa Land Investment Expo by Elizabeth Williams of DTN. Her assignment, as one of the keynote speakers, was to update the attendees on the Farm Bill. I expected her to discuss subsidies, pricing issues, … (2 comments)
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iowa section 1031: Humor - Neologisms - 02/14/08 04:06 PM
Although there is little doubt that my typical blog posting is full of humor from start to finish… I’ve never written a blog that was designed at the outset to be humorous. Okay, so that first part is a stretch...
At any rate, the Washington Post apparently periodically asks its … (7 comments)
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iowa section 1031: Once Again on the Farm Bill - 02/13/08 03:52 PM
One more time on the Farm Bill… I reported in my blog Would You Like Some Good News? Success Regarding Like-Kind Status in the Farm Bill on January 25, 2008, that the provision in the Senate version of the bill that had sought to re-define like-kind status as it pertains … (0 comments)
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iowa section 1031: Omaha1 Real Estate Investment Association Meeting - 02/13/08 11:33 AM
You are invited to the Omaha1 Real Estate Investment Association meeting to be held on Monday, February 18, 2008, at the Westside Community Conference Center, 3534 South 108th Street, Omaha, Nebraska, and beginning at 7:00 p.m.
Come hear Ken Tharp from IOWA EQUITY EXCHANGE speak on the subject of … (0 comments)
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iowa section 1031: Iowa Land Investment Expo - 02/13/08 10:56 AM
The first Iowa Land Investment Expo will be held in Des Moines, Iowa, this Friday, February 15, 2008, at the West Des Moines Marriott, 1250 Jordan Creek Parkway, West Des Moines, Iowa.
IOWA EQUITY EXCHANGE is pleased to be an Exhibitor at this great event. Ken Tharp will be present … (2 comments)
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iowa section 1031: Commercial Revenues Up At One Firm During 2007 - 02/06/08 12:20 PM
Commercial revenues were up at one firm during 2007, according to an article in the Commercial Real Estate Weekly email publication of Business Publications Corporation in Des Moines, Iowa. The Quad City Times reports that NAI Ruhl & Ruhl Commercial Company set a sales record for the firm in 2007, … (0 comments)
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iowa section 1031: Land, India, Crop Prices, and Hershey’s Chocolates - 02/01/08 03:08 PM
What possible connection could land, India, crop prices, and Hershey’s chocolates have to one another? This may take a few minutes… Three recent articles have driven home to me the reasons that the public is unusually uncertain about what is going on in our economy. First was an article online … (3 comments)
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iowa section 1031: Would You Like Some Good News? Success Regarding Like-Kind Status in the Farm Bill - 01/25/08 10:37 AM
Would you like some good news? There has been success regarding the like-kind status in the Farm Bill! More to come on this later, but for now, please allow me to announce that the provision contained in the Senate version of the Farm Bill that sought to re-define the concept of … (3 comments)
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iowa section 1031: Midwest Farmland Prices Spike Higher During 2007 - 01/22/08 09:52 AM
Midwest Farmland Prices soared during 2007, according to the Des Moines Register today. According to the appraisers at Farm Credit Services of America, farmland prices increased 20% or more in three of the four states covered by the organization (Iowa, South Dakota, and Wyoming) during 2007, with the fourth (Nebraska) … (5 comments)
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iowa section 1031: Midwest Farmland Exchanges: Cause of High Land Values or Merely Effect? - 01/21/08 04:14 PM
Are Farmland Exchanges occurring in the Midwest in states such as Iowa the cause of high land values or merely an effect? The answer depends upon who you ask, but my personal opinion is that high Midwest farmland values are a lot more likely the result of the increased need for … (5 comments)
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iowa section 1031: The Next Verse... Today's Update on the Farm Bill - 01/15/08 06:41 PM
I hope you're hanging in there with me on this subject. It seems like there's a new development every day or so now. Yesterday I posted on the fact that Congress is back in session and the Farm Bill is something that they will be working on putting together as soon … (9 comments)
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iowa section 1031: The Farm Bill - The Latest News Regarding Section 1031 - 01/11/08 07:25 PM
As part of a continuing effort to keep you up to date on the implications that the Farm Bill currently being considered in Washington, DC. may have on Section 1031 tax-deferred exchanges, here's the latest: As you know if you have read my two previous blogs on this subject (the … (5 comments)
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iowa section 1031: The 45-Day Identification Period - A Hindrance or Not So Much? - 01/11/08 11:07 AM
Part of a successful Section 1031 tax-deferred exchange is meeting the requirement that potential replacement properties be properly identified within forty-five calendar days after the closing of the relinquished property. Time out for definitions: Replacement property = the properties that an exchanger would consider purchasing to replace the ones s/he is … (12 comments)
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iowa section 1031: European-Based Insurance Group to Create U.S. Headquarters in West Des Moines - 01/08/08 12:00 PM
The acquisition of land in West Des Moines for the United States headquarters of London-based Aviva was finalized recently. Aviva is the fifth-largest insurance group in the world based on gross worldwide premiums as of 12/31/06. Aviva US is ranked #1 in sales of "indexed life insurance," which appears to be … (4 comments)
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iowa section 1031: "Home Prices Fall by Record 6.7%" - What Do You Think? - 12/27/07 09:24 PM
The headline in the Des Moines Register Business section today says, "Home prices fall by a record 6.7%." That's in October year-over-year terms, according to the article. The story also notes that October was the 23rd consecutive month during which prices either fell or grew more slowly than they did in … (5 comments)
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iowa section 1031: Happy Holidays - 12/26/07 04:52 PM
I feel like I'm just getting started here at activerain, but I wanted to wish anyone who reads this a very Merry Christmas (a day late), a Happy New Year, and happy holidays regardless of what you happen to celebrate. Special wishes to anyone who is spending the holidays away from … (6 comments)
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iowa section 1031: Iowa Farmland Sees Its Greatest Increase in Value Since 1976 - 12/19/07 05:22 PM
According to the Des Moines Register, Iowa farmland prices set a record this year for the fifth year in a row. The average price of farmland in Iowa is now $3,908 per acre. This is based upon an annual survey conducted and released by the Iowa State University Extension. Here’s the … (6 comments)
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iowa section 1031: Update on the Farm Bill and Its Impact on Section 1031 - 12/19/07 04:59 PM
A little over a month ago, I wrote a blog about Section 12504 of the Farm Bill that was under consideration by the Senate at the time. (You can read it here.) The focus of the blog was the general impact on Section 1031 that a particular subsection of the bill … (30 comments)
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iowa section 1031: An Iinteresting and Fun Experience - 12/17/07 09:45 PM
Something interesting happened last week, and it turned out to be a lot of fun. I had the opportunity to visit by phone with another ARer, Jason Smith. Jason is exactly the kind of real estate agent I like to deal with when I need someone to represent me: the kind … (2 comments)
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iowa section 1031: Dealer Property Issues—Property Held for Sale - 12/17/07 05:03 PM
There is often confusion when it comes to defining what property qualifies for an exchange. Sometimes it is easier to describe situations that do not qualify. Real estate that is owned as “stock in trade or other property primarily for sale” cannot be exchanged. This type of property is deemed … (4 comments)
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iowa section 1031: A Serious Threat to Section 1031—Section 12504 of the Current Farm Bill - 11/13/07 10:28 AM
Until this point, my blogs have consisted of setting out the benefits of Section 1031 exchanges and the mechanics of the actual exchange. Today I want to address a critical issue regarding the future of tax-deferred exchanges. SECTION 12504 Many of you do not follow the industry of agriculture very … (7 comments)
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iowa section 1031: “Held for Investment”—What's That? - 11/08/07 04:31 PM
“HELD FOR INVESTMENT”—WHAT'S THAT? The actual wording of Internal Revenue Code §1031 says that in order to qualify for tax-deferred treatment, the property owner must sell property that has been “held for productive use in a trade or business or for investment” (emphasis added) and purchase property of like-kind. Often, … (0 comments)
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iowa section 1031: What Real Estate Agents Need to Know About §1031 Tax-Deferred Exchanges - 10/26/07 04:37 PM
It's clear that Section 1031 tax-deferred exchanges provide real estate agents a tremendous opportunity to increase commissions. But more importantly, you are serving your client's best interest when you are able to recognize an opportunity for a tax-deferred exchange. Think about it. What's better for your client? Paying taxes, or being … (2 comments)
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iowa section 1031: Section 1031 Tax-Deferred Exchanges—An Overview - 10/24/07 04:18 PM
WHAT IS SECTION 1031? Section 1031 of the Internal Revenue Code (IRC) allows an owner of investment property to defer the payment of federal and state capital gain taxes by purchasing “like-kind” property following the rules and regulations of the IRC. Capital gain taxes are typically 15% of the gain, … (2 comments)
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iowa section 1031: What Is A Qualified Intermediary? - 10/22/07 04:48 PM
Let's talk about what a Qualified Intermediary does, and even what a Qualified Intermediary is. The Internal Revenue Code establishes the use of a Qualified Intermediary as a "Safe Harbor" for the performance of a tax-deferred exchange under the rules and regulations of Section 1031. What's a Safe Harbor? Essentially, it … (0 comments)
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