We have published and distributed annually on our website www.1031.us the comprehensive IRS form 8824 Workbook by Ed Horan titled "Reporting the Like-Kind Exchange of Real Estate Using IRS Form 8824." The workbook is written and made available because Form 8824 itself is very complicated and uses terms most exchangors are not familiar with. The … [Read more...]
Tax Reform Threatens 1031 Exchanges
In a recently published article Ken Harney, nationally syndicated real estate author, explains how 1031 exchanges are used and how they are threatened under the House Ways and Means tax reform proposal. A very large portion of 1031 exchanges are done by small real estate investors. In the article Bill Horan, of Realty Exchange Corporation, … [Read more...]
1031 Exchange helps avoid the Net Investment Income tax
A 1031 exchange reinvests in replacement property. A tax payer does not recognize the capitol gain on their tax return and avoids the 3.8% Net Investment Income (NII) Tax. Recently the IRS distributed IRS Tax Tip 2016-28 which helps taxpayers determine if they must pay the 3.8% NII … [Read more...]
Ask for Your QI Brochure
The national Federation of Exchange Accommodators (FEA), ‘The Voice of the 1031 Industry’, has published a brochure that provides taxpayers with those areas of concern in which they should determine in advance a QI firm qualifications and experience. The brochure notes the importance of having a Certified Exchange Specialist® (CES®) on staff as … [Read more...]
President’s 2017 budget puts more limits on 1031 exchanges
President’s 2017 budget limits more 1031 exchanges The President’s 2017 budget proposes the capital gain deferred on 1031 exchanges of all property be limited to one million dollars, per taxpayer, per year, effective at the end of 2016. This change is a dramatic limitation of 1031 exchanges on all business assets. Last years budget proposal … [Read more...]
1031 Exchangers Should Anticipate Possible Settlement Delays
1031 Exchangers should anticipate settlement delays with some delays caused by the new TRID Closing Procedures. A recent NAR survey of real estate agents found nearly one-third of all transactions encounter a delay of some sort. The majority of the delays were from financing issues. Some of the delay is from the new TRID Closing Disclosure (CD) … [Read more...]
IRS Requests comments on the 1031 Exchange Form 8824
A 1031 exchange is reported on IRS form 8824 The IRS has requested comments on IRS Form 8824, ‘Like-Kind Exchanges’, be submitted to them prior to March 21, 2016. The Form 8824 is used by all taxpayers completing an IRC Section 1031 exchange to report the exchange of business or investment property, and deferral of capital gain. This routine … [Read more...]
Residential Landlord use of Bonus Depreciation
Residential Landlord use of Bonus Depreciation A residential landlord should understand and use this tax benefit. To avoid a government shutdown the Congress passed in December 2015 what is commonly called the “extenders bill’ - Protecting Americans from Tax Hikes Act of 2015 (Path Act). In addition to extending many tax provisions the law … [Read more...]
MD nonresident withholding on real property sales rises to 7.5% for individuals
Maryland has announced that as of January 1, 2016, the amount to be withheld at settlement from nonresident individual sellers and exchangers of real property is now 7.5% of the net proceeds. For nonresident entities the rate is 8.25%. The law has been in place since 2003 shocking many non-resident sellers who are unaware that MD will take a … [Read more...]
Delay to TRID Effective Date
The CFPB has formally proposed to delay the TILA-RESPA ( TRID ) final rule effective date to Saturday, October 3, 2015. The TRID rules apply to covered “closed-end credit transactions secured by real property” for which the creditor or mortgage broker receives an application on or after the new proposed effective date of Oct 3, 2015. This … [Read more...]
