Delaware Statutory Trust (DST)
A 1031 Exchange Replacement Property Alternative

Honey, who shrunk the inventory? When an investor sells investment property and would like to utilize IRC Section 1031 to defer the tax on that sale, the investor may find it challenging in today’s market to locate a suitable replacement property. One possible solution for certain investors, particularly “accredited investors” (high net worth individuals and certain entities, as defined in Regulation D of the Securities Act of 1933) is to acquire an interest in a Delaware Statutory Trust (“DST”) as replacement property to complete the exchange.

A DST is a type of trust formed under Delaware law. Provided that the DST’s governing documents conform to the requirements of Revenue Ruling 2004-86 (See: Revenue Ruling 2004-86), a DST investor’s ownership interest in the DST is treated as a fractional interest in the property owned by the DST. Consequently, if the DST owns like-kind replacement property, an exchanger can acquire a fractional interest in the DST to complete the tax deferred exchange. For the full article on Delaware Statutory Trust (DST), Read More…

Custom 1031 Exchange Materials

Vacation Homes and Other Ownership Tax Issues

Vacation Homes Handbook
» Click here to download

According to the National Association of Realtors, the vacation home market is heating up again and many real estate professionals are reporting strong sales in many vacation home hot spots.

In response to increased activity in many vacation markets, Asset Preservation has created a brand-new Vacation Home Handbook that covers many tax issues related to the ownership and sale of a vacation or second home. This brochure is very comprehensive, contains hyperlinks to key tax code sections and provides useful guidance to property owners, real estate professionals, closers, attorneys and CPAs in resort communities and vacation home marketplaces throughout the United States. This is a “must have” resource for anyone involved with real estate in a vacation area or resort market!!

API’s Vacation Homes Handbook contains the following information:

    This section discusses the “safe harbor” for exchanges of vacation homes and also what will not qualify for an exchange of a vacation home property.

    1. Second Home/Vacation Home with No Rental Activity
      1. Tax Consequences during Ownership
      2. Tax Consequences at Disposition
      3. How to determine if a vacation property could be considered a principal residence and qualify for Section 121 tax exclusion
    2. Second Home/Vacation Home Rented Less than 15 Days a Year
      1. Tax Consequences during Ownership
      2. Tax Consequences at Disposition
    3. Vacation Home Rented for More than 15 Days a Year
      1. Tax Consequences during Ownership
      2. Tax Consequences at Disposition
    4. Property Held Primarily for Investment in a Vacation Area
      1. Tax Consequences during Ownership
      2. Tax Consequences at Disposition

From The Wall Street Journal – High-Impact Tax Breaks

The year is half over. So it’s time to make sure you are making your best tax moves for 2013. “People need to be proactive,” says Janet Hagy, a certified public accountant in Austin, Texas. “By December, it may be too late.” Read More…

New Reporting Requirement For Certain California 1031 Exchanges

California has enacted a new reporting for taxpayers who exchange out of a relinquished property located in California and into replacement property located outside of California. For tax years beginning on and after January 1, 2014, taxpayers that exchange out of California must file a report with the Franchise Tax Board for the year of the exchange and for subsequent tax years. The statue creates a new procedure for tracking deferred gain and Section 18032 has been added to the California Revenue and Taxation Code. California has always maintained that the deferred gain was taxable in California and this new procedure will make it easier to enforce these rules. Read More…

America’s 10 Most Overvalued and Undervalued Housing Markets

Forbes’ Morgan Brennan taps into Fitch Ratings analysis of where home prices have gone out of whack–either higher or lower–with income and household growth fundamentals in given markets. Brennan’s theory is that the price overcorrection to the downside is overcorrecting in some markets to the upside, and that equilibrium will come as more sellers list their homes and “normal” transactions reflect fundamental supply and demand trends. Read More…

Webinar: §1031 Exchanges & Tax Planning in an Environment of Increasing Taxation

This 1.5 hour CPE course provides a concise and thorough overview of IRC Section 1031 tax deferred exchanges for accountants, CPAs and financial advisors. In addition to covering critical IRS time deadlines, “like-kind” requirements and other exchange related issues, the class will provide a summary of current developments including applicable Revenue Rulings, PLR’s and other IRS guidance on current issues related to exchanges. Register Now…

Dates: August 19th
Time: 12:00 p.m. – 1:00 p.m. EST
Cost: Free
Credit: 1.5 Hours (CPE)

NAREIT Launches App for REIT Investors

NAREIT has launched a mobile app created for the investor community called the REIT Investor App. The REIT Investor App offers investors a clean, concise experience, allowing the user to quickly check the pulse of the industry from a macro level down to specific companies.

To download the complimentary REIT Investor App, search “REIT Investor” in Apple’s App Store.

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