Recent Tax Proposals vs Tax Certainty with 1031 Exchanges
Taxation, tax rates, tax deductions and overall tax fairness are certain to be dominant themes in a year with a presidential election in the fall. Many different tax proposals have been put forth by various committees and government representatives, but most believe that these proposals stand little chance of being enacted into tax law. Following is a brief overview of several different tax proposals. Read more…
Tax Planning Uncertainty – Click here to read about the Buffet Rule and other recent tax proposals.
Tax Planning Certainty – Click here to see an example of the differences in taxes owed from selling appreciated property in 2012 and 2013, versus exchanging and paying no taxes.
1031 Basics: 45/180 Day Calculator
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From the closing on the sale of the relinquished property, an exchanger must: (1) properly identify potential replacement properties within 45 calendar days (the “Identification Period”) and; (2) close on the replacement property(ies) within 180 calendar days of the transfer of relinquished property sale (the “Exchange Period”). To access a calculator and determine your 45 day Identification Period and 180 day Exchange Period, click here… |
Proposed IRS Regulations re: Certain REIT and RIC Transfers
On April 13, 2012, the IRS released proposed regulations under IRC Section 337(d) providing guidance about certain transfers of property from a C Corporation to a real estate investment trust (REIT) or regulated investment company (RIC). These proposed regulations provide favorable treatment for such property transfers if the transfer qualifies for tax deferral under either IRC Section 1031 or IRC Section 1033. Read more…
IRC Section 1033 Involuntary Conversion Case
IRC Section 1033 permits a taxpayer to defer taxation when their property has been taken through involuntary conversion. In a recent case, a San Diego, California owner sold property to a private developer under threat of eminent domain by the City of San Diego, and invested the proceeds in a replacement property pursuant to the requirements of Section 1033. The property owner applied to the County to transfer the Proposition 13 base year value to the replacement property, but the County denied this request because even though the sale was under threat of eminent domain, the property was sold to a public entity. In Duea v. County of San Diego, the court agreed with the County and held that since the sale was not to a public entity, the property owner was not entitled to have the Proposition 13 base value transferred to the property the owner acquired. Read more…
Side Effects of Cost Segregation
Increased current cash flows and net present value savings from accelerated tax depreciation are benefits of a cost segregation study. The decision to have cost segregation performed will have later tax side effects, both positive and negative. This article in the Journal of Accountancy explores some of the tax benefits and drawbacks linked to the use of cost segregation that can materialize in subsequent periods, including the interplay with 1031 exchanges. Read more…