Section 199A Guidance for Real Estate Investors on 20% Deduction

The tax code provides incentives to encourage taxpayers to invest in real estate. Section 1031 exchanges, which have been a valuable tax deferral strategy since 1921, help real estate investors redeploy capital on a tax-deferred basis at the time of disposition into more desirable “like-kind” replacement properties or a property that provides a better return on investment. A new section of the tax code, Section 199A, offers the potential for certain real estate investors to also receive favorable tax benefits in the form of an added deduction while owning and managing investment properties. The potential to receive tax benefits while owning investment property, coupled with the option for tax deferral in a 1031 exchange at the time of sale, provide investors who own real estate with significant and meaningful tax advantages. Read More

Join one of our one-hour 1031 exchange webinars for tax and legal advisors (CPE credit available). These webinars tackle issues such as reverse and improvement exchanges, related party issues and how to avoid common pitfalls. You will receive a summary of current developments regarding possible tax reform and the implications on 1031 exchanges. Webinar Details.

Millennials remain the largest home-buying segment for the fourth consecutive year in the U.S. As the largest population demographic ever in the country, where they live and work will impact the economic landscape of the country for decades to come. Read More

Asset Preservation would appreciate the opportunity to work with you on your next exchange regardless of how simple or complex. Give us a call at 800-282-1031 with any 1031 related questions or Ask a Question online.

By: Matthew E. Rappaport, Esq., LL.M.

As everybody probably knows by now, I’ve been part of the enthusiastic chorus of advisors singing the praises of the Opportunity Zone Program. Make no mistake: the program is a game-changer for private equity and the real estate industry. We’ve already seen the widespread impact across the country in many markets where Opportunity Zones are located.

But some of the hype has led commentators to declare the end of the Section 1031 exchange. As the Opportunity Zone program takes shape, and as I conduct in-depth conversations with clients and advisors about taking advantage of the tax incentives, the way taxpayers will approach the program has become increasingly clear. Read More

It is common for a taxpayer to make repairs, updates, and improvements to enhance a relinquished property in preparation for listing with a real estate agent or broker. A commonly asked question is, “Can I be reimbursed from the 1031 exchange for the costs associated with improving or repairing the property immediately before the sale?” The answer is no, not without generating a tax consequence. The reason for this is that any exchange proceeds a taxpayer receives from a 1031 exchange are considered “boot” and are generally taxable to the extent the taxpayer has a capital gain tax consequence. Read More