1031 Exchange eNews

Tenant In Common Ownership

There are a variety of ways investors can hold title to investment real property. To see a simple comparison, click: Holding Title to Real Property, a Comparison of Three Different Methods. This article will address tenant in common ownership of real property.

Tenant in common ownership, sometimes called a tenancy in common, is a method of holding title to property involving multiple owners that originated in English Common Law. Currently, all states recognize tenant in common ownership. Where a tenancy in common arrangement is created, each individual owner, called a "co-tenant" or "co-owner," is said to own an "undivided interest" in the property. There can be any number of co-owners. A significant feature of a tenancy in common is that each co-tenant has the right to use the entire property even though their respective interest in the property is generally less than 100%. This common right to use the whole property can create conflicts among the co-owners, so it is generally advisable to have a written tenancy in common agreement among the co-owners covering the owners’ obligations to maintain and use the property.

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Tax Freedom Day

Tax Freedom Day 2013 was April 18, five days later than last year. What is Tax Freedom Day? Tax Freedom Day is the day when the United States as a whole has earned enough money to pay the total tax bill for the year. Tax Freedom Day essentially divides all federal, state, and local taxes by the nation’s income. Tax Freedom Day is later this year, due mainly to higher federal taxes on income, capital gains and the new 3.8% Medicare surtax that went into effect on January 1, 2013. Read More…

1031 Basics: Identify Within 45 Days

Section 1.1031(k)-1: Treatment of deferred exchanges states that "the identification period begins on the date the taxpayer transfers relinquished property and ends at midnight on the 45th day thereafter." In the Tax Court case, Dobrich vs. Commissioner, the taxpayers committed tax fraud by falsifying the date property was identified. To learn about the importance of identifying within 45 Days, Read more…

Where Investing in Rental Homes is Most Profitable

A study recently released by RealtyTrac, and on The Wall Street Journal’s website, indicates areas where investors may be able to make the most money owning single family rental homes. The study uses a formula that calculates the projected capitalization rates.

For the full article on Where Investing in Rental Homes is Most Profitable, Read More…

What Triggers an IRS Audit?

The IRS examined 1.1 percent of all individual tax returns in 2010 and 2011, so the chances that an individual taxpayer’s return will be audited are only about 1 in 90. However, the odds of an audit can increase substantially depending on the taxpayer’s total income, types of income, deduction amounts and changes made since filing the last tax return.

For the full article on What Triggers an IRS Audit?, Read More…

Top 30 Growth Cities

U-Haul International, Inc., released results of its annual U-Haul National Migration Trend Report that reflects the nation’s top growth areas for families that moved during 2012.

Click here to view the U-Haul 2012 Top U.S. Growth Cities Report indicating cities with more than 5,000 families moving.

Zillow’s California Home Value Forecast Through February 2014

Zillow chief economist Stan Humphries predicts some home value percentage changes from February 2013 to February 2014.

For the full article on Zillow’s California Home Value Forecast Through February 2014, Read More…

Coldwell Banker’s Luxury Market Report

Coldwell Banker Previews International®, Coldwell Banker brand’s luxury real estate program, released is Luxury Market Report providing a snapshot of the luxury market from January 2012 – December 2012. Read More…

An Analysis of the New Capital Gain Taxes

The familiar adage, "It’s not how much you make, but how much you keep"; rings truer than ever for real estate investors in 2013. Not only have capital gain taxes increased significantly for high earners, but many investors below the top tax bracket face an additional 3.8% surtax on passive investment income like capital gains. Fortunately, IRC Section 1031, a provision which has been in the tax code since 1921, provides critically needed tax relief.

Under the American Taxpayer Relief Act of 2012, the top capital gain tax rate has been permanently increased to 20% (up from 15%) for single filers with incomes above $400,000 and married couples filing jointly with incomes exceeding $450,000. In addition, the new IRC Section 1411 3.8% Medicare surtax on net investment income, which includes capital gains, results in an overall rate for higher-income taxpayers of 23.8% — a staggering 58% increase from 2012 tax rates!

For the full article, including the 4 Steps Involved in Determining Capital Gain Taxation and the Snapshot of 2013 Federal Capital Gain Taxation, Read More…

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