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Impending Increases and Tax Breaks - What Real Estate Investors Need to Know
As we approach 2011, there are many tax changes on the horizon.
Including:
•· Increases in federal long term capital gains rates,
•· Increases in ordinary income tax rates,
•· Treatment of carried interest,
•· 3.8% tax applied to some property sales and passive rent income through The Health Care and Education Affordability Reconciliation Act of 2010,
•· Return of the estate tax, and
•· Private transfer fees (also known as capital recovery fees).
For a more complete discussion of these topics and other issues that will affect your investments in 2011, click here.
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First American Title Announces AgentFirstTM Real Estate Mobile Application for AndroidTM and BlackBerry® Smartphones
TM Real Estate Mobile Application for AndroidTM and BlackBerry® Smartphones" type="#_x0000_t75" o:button="t" href="http://email.ervinad.com/t/y/l/qutlkl/odhjtdiuh/o">
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Attend a Complimentary Webinar
The Basics of the 1031 Tax-Deferred Exchange
Thursday, December 16, 2010
For more information or to register, go here.
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The Three Rules of Identifying 1031 Exchange Property
The Regulations place strict limits on the number of properties that may be identified. If too many properties are identified, it is treated as if no identification had been made. Reg. § 1.1031(k)-1(c)(4). There are three rules that may be applied. These rules are independent of each other, so the Taxpayer need fit under only one of the three rules to have a qualifying exchange.
•· Three-Property Rule - The Taxpayer may identify up to three properties as replacement property without regard to their fair market value. This is the most commonly used identification rule.
•· 200% Rule - The Taxpayer may identify more than three properties as replacement property if the aggregate fair market value of the properties at the end of the identification period does not exceed 200% of the fair market value of the relinquished property as of the date the relinquished property was transferred by the Taxpayer.
•· 95% Rule - The Taxpayer may identify more than three properties and more than 200% in value as replacement property if the Taxpayer acquires identified replacement property with a fair market value equal to at least 95% of the aggregate fair market value of all the identified replacement properties. As a practical matter, a Taxpayer using this rule will probably have to acquire all of the identified properties.
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