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Saturday, October 30, 2004

HAPPY HALLOWE'EN! 

No "Trick" to Calculating 1031 Tax Matters

Recently one of my clients almost ran into trouble around calculations and her 1031 Like-Kind Exchange. Luckily, she had a solid financial team to advise her. They reminded her that at the time of the exchange, the tax basis from the original property is rolled over into the exchanged property. In order to completely defer all her taxes from the exchange transaction, two (2) rules had to be followed:

1. My client had to acquire property with at least as much equity as the prior equity in the exchanged property.
2. My client had to assume as much debt as the prior debt on the exchanged property.


My client confided that she thought it might be difficult, but it turned out that the tax liability to be deferred was easily calculated! First, she and her team found the sum of the original purchase price plus non-expensed improvements, minus all depreciation taken. That is the adjusted basis. The depreciation had to be recaptured at a federal 25% tax rate plus varying state rates.

The total appreciation of the property is the net sale proceeds minus the original cost and cost of improvements. The appreciation is taxed at the 15% federal capital gain tax rate plus the state capital gain tax rate.

My client learned that the total of these two (2) federal tax liabilities and two (2) state tax liabilities was the tax than she could deferred through her 1031 Exchange.

On Hallowe'en give yourself the treat of a financial team to support you as you work through the 1031 Exchange.

That' way you won't have any "BOOoo!-BOOzzz"

Email for resources: asheville1031@janeAnne.com

More articles: www.janeAnne.com


Friday, October 29, 2004

1031 Exchange Articles/ Table of Contents 

1031 BUYERS: Be Aware of the Pros and Cons of Conservation Easements
1031 Exchange and the ECO-STEWARD---
BUILDING BRIDGES TO THE FUTURE
ENVIRONMENTAL DESIGN...PROGRESS, YES!
The GREEN BUILDING COUNCIL
ATTITUDE and the 1031 Exchange Real Estate Investor
You CAN Use Your IRA to Invest in Real Estate in North Carolina
4 BASIC RULES of 1031 Exchanges
Asheville's
GREEN BUILDING Council

1031 Tax-Deferred Exchanges and the SPECIAL QI
Save the Gray-Haired Agents, a 1031 Specialist's Lament
news~ MORTGAGE RATES EASE
1031 and NEW Ways to Build
1031 Exchanges & The Role of The Qualified Intermediary
1031 exchange FAST FACTS links!
WHAT is Section 1031 of the U.S. Internal Revenue Code All About?
The 1031 Exchange: An Intriguing Perspective and Examples
ASHEVILLE: #1 for Investing in a Second Homes
Attention Condo Buyers/Investors
B&B FOR SALE ~Asheville
WHAT TYPE OF B&B IS FOR YOU?
THE B&B BUSINESS PLAN
YOU Can Create a Land Legacy
ECO-VILLAGES in the Greater Asheville Area
ENVIRONMENTAL STEWARDSHIP
Who Represents YOU in a Real Estate Transaction?
FAMILY DESTINATIONS in the Greater Asheville Area
HORSE FARMS and EQUINE PROPERTIES
WANT TO OWN A B&B? Is inn-keeping for YOU?
QUALIFYING FOR A 1031 EXCHANGE (1031 Like-Kind Exchange)
1031 LIKE-KIND EXCHANGE and the QI
BENEFITS OF THE 1031 LIKE-KIND EXCHANGE
INTERVIEWING A REALTOR
How to Find THE "Right" ONE for You
FROM A HILLTOP OVERLOOKING THE RIVER
A narrative on life in Western North Carolina
ENVIRONMENTALLY SENSITIVE DEVELOPMENT i
n the Asheville AreaPreserves and Land Conservancies
HOME ENERGY RATING
Good information for the home buyer
EXCEPTIONAL PROPERTIES
Amazing tracts of land, land trusts, land preserves and spectacular properties
CLUSTER HOUSING AND LARGE TRACTS OF LANDS
Interesting information on this form of development

LAND FOR INVESTMENT
Residential, farm and estates, vacant land, mountain getaways, 1031 Like-Kind Exchange1031
1031 LIKE-KIND EXCHANGES
an Overview for You
1031 ~ LOOKING FOR 1031 LAND FOR INVESTMENT?
A word or two about my philosophy that YOU shall be served well ...

FYI: MADISON COUNTY, NORTH CAROLINA
For those of you who have discovered the lands I love,
(and where I am a "Green REALTOR, )
here is some info...
LAND BUYS THAT LOOK TO THE FUTURE
About the work The Nature Conservancy has done around the Greater Asheville area
in which YOU can participate.

PRESERVES AND PROTECTED LANDS IN NORTH CAROLINA
About the protected beautiful sites across N.C. including one within hours of Asheville
MOUNT MITCHELL
THE CONTINUING SAGA OF THE LITTLE HORSE FARM
NEAR ASHEVILLE, NORTH CAROLINA
COULD THIS BE A PLACE FOR A THERAPEUTIC RIDING CENTER?
Horse farms and Equine Properties For Sale Around Asheville are my specialty.
MORE ON THE FAMILY HORSE FARM Near Asheville
~ Possible Use for Retired Horse Lovers-
A Business for Retired Horses!
HORSE FARMS FOR SALE, HORSE FARMS FOR SALE,
Oat Oh! I'm thinking maybe I should buy one near Asheville!
Horse Farms and Equine Properties For Sale Around Asheville Are Magnetic!
THE NATURE CONSERVANCY'S "CONSERVATION BUYER" PROGRAM”
TO BE RATHER THAN SEEM....."
The North Carolina state motto is” Esse Quam Videre”

For 1031 Exchange Investors/ Pros and Cons of Conservation Easements 

“The volatile environment surrounding conservation easements makes it important to tread carefully when working on a deal involving one, “ says REALTOR Magazine.

“ Sellers who've previously ceded development rights may have focused on the tax breaks but not on how the restrictions would impact a future sale.

Given the above, my advice to you is that if you are considering placing land into a conservation easement is: 1) Defer to the experts, and 2) Make sure you have a thorough understanding of the terms of the conservation easement, how it's managed, and by whom. I always encourage my clients to hire an attorney. S/he can spell out what the conservation easement does and does not allow, and help you sort through the details of such a transaction, especially now that IRS scrutiny is amplified.

“Because valuation is at the core of many IRS concerns, getting a good appraiser is key to ensuring that the appraisal is neither inflated nor undervalued,” says Clayton Andrews, managing broker of Sotheby's International Realty in Jackson, Wyo., and a member of the Jackson Hole Land Trust's Open Space Advisory Council.

With the above caveat in mind….Conservation-minded buyers who are interested in owning permanently protected property with high scenic, open space, and natural resource value will find many opportunities here in the Greater Asheville area.

Contact ecoSTEWARD@janeAnne.com for information.

Thursday, October 28, 2004

ECO-STEWARD---BUILDING BRIDGES TO THE FUTURE 

***


We are investing our time and efforts in building bridges to the future.

Our company, Eco-STEWARD Realty works with individuals and groups to identify and put into permanent protection significant open space in the greater Asheville area of Western North Carolina. Our goal is to help protect more than 20,000 acres by 2010. You know, the most straightforward way to protect land is to take permanent ownership. If you are reading this, the Appalachians are calling you!

You can establish a Land Trust, (possibly even do this with a portion of your 1031 Exchange) set aside a small portion of it for you and your family, and be confident that the land's future is secure from development and mismanagement. The conservation easement is a flexible tool that protects land while leaving it in private ownership.

I asked Pete Henry, an attorney who has worked with us on numerous occasions to define a conservation easement.

“The easement, “he told me, “is a legal document, guides future uses of a property regardless of ownership. A landowner generally donates the easement to a qualified conservation organization or government agency which in turn ensures that the conditions of the easement are met over time.”

“What are some of the benefits of a conservation easement?” I wanted to know.

“Well,” Pete said, “Easements provide numerous benefits!”

“I think that one of the most attractive features is that the landowner retains title to the property. This means that the landowner and can live on it, sell it, or pass it on to heirs, knowing that it will always be protected.”

“Can you give me an example of how this might work?” I asked.

“Well, janeAnne, I can think of one family who was looking at selling their land so that they could raise the cash to pay estate taxes. Luckily, they heard about easements. They created an easement which greatly reduced the estate taxes, and prevented the forced sale of their properties. By the way, easements may also provide income tax and property tax reductions by eliminating unwanted development value.”

I asked a client of mine about a Land Trust she is putting together. Knowing that a land trust or government agency ensures that restrictions are followed in perpetuity, I wondered what rights she would choose to maintain.

“We will retain many rights associated with the land,” she explained, “but will retain the right to build a small number of residences while relinquishing the right to grow crops.”

She had discovered first-hand how easements can be tailored to protect the land's natural and cultural values, meet financial and personal needs, and attain conservation goals.

“Our investment group has decided to retain the right to create future building lots, but we will limit the number to far less than would be allowed under local zoning, and protect the waterfalls on our property by limiting the location of future structures and the types of land use activities that can take place. Of course, we will allow for hiking and horseback riding, and picnicking by the falls.”

With the involvement of surrounding communities, you can create an environment where both human and natural needs are met - where appropriate recreation, educational and scientific programs are available without harming the natural resources that make our mountains and valleys unique.





ENVIRONMENTAL DESIGN...PROGRESS, YES! 

*****

LEADERSHIP IN ENERGY AND ENVIRONMENTAL DESIGN
A New Rating System Announced

There’s a big buzz the Asheville, North Carolina Green Builder’s Association. The U.S. Green Building Council (USGBC) has just announced the release of the much anticipated LEED for Existing Building (LEED-EB) Green Building Rating System.

Previously in pilot, the rating system has been fully balloted by the USGBC membership and is ready to launch. LEED-EB was designed to meet market demand for an existing building rating system following the success of LEED for New Construction (LEED-NC), the USGBC’s current rating system for new construction. LEED-EB makes LEED certification available to existing buildings and provides an opportunity for ongoing recertification for previously certified LEED buildings. LEED-EB helps building owners and managers bring the performance of their buildings up to a high level and maintain high performance over the long term.

Benefits of LEED-EB include energy savings, water savings, and healthier indoor environments.

“We are very excited that LEED-EB has been approved by the ballot of our USGBC members,” said Rick Fedrizzi, USGBC President, CEO & Founding Chair. “LEED-NC is rapidly transforming the design and construction of new buildings to sustainable practices. Now with LEED-EB approved, the USGBC has the tools in place to start transforming the existing buildings market to sustainable practices as well. With both LEED-EB and LEED-NC in place, the USGBC is positioned to help building owners and mangers make both new and existing buildings improve their performance over time and become more sustainable.” Some of you may want to attend the GREEN BUILDING COUNCIL EXPO in Portland, Oregon.

For more information on that, please do go ahead and email me:
ecoSteward@janeAnne.com
or read on in this BLOG.

The GREEN BUILDING COUNCIL 

I was excited to hear from my friends in Portland, Oregon that they will be attending the EXPO of the GREEN BUILDING COUNCIL in that wonderful city ...The EXPO is just a couple weeks away, so if you happen to live in that part of the world, or want a great excuse to visit Portland, you still have time to make your reservations.

In case you have not heard of the Green Building Council, here's a backgrounder:

USGBC Backgrounder

The U.S. Green Building Council (USGBC) is the nation's leading nonprofit coalition for advancing buildings that are environmentally responsible, profitable and healthy places to live and work. Major programs supporting its mission include the Council's Leadership in Energy and Environmental Design (LEED®) Green Building Rating System; LEED Workshops; LEED Professional Accreditation; the Greenbuild International Conference & Expo; and a robust local chapter program.

Since its founding in 1993, USGBC has been focused on fulfilling the building and construction industry's vision for its own transformation to high-performance green building. Today, it includes over 5000 member companies and organizations -- representing more than 1000% growth in the past four years alone. During that same period, more than 188 million square feet of commercial building space has been registered or certified under LEED, and the annual US market in green building products and services has grown to $5.8 billion.

Industry-led and consensus-driven, the Council is as diverse as the marketplace itself. Membership includes building owners and end-users, real estate developers, facility managers, architects, designers, engineers, general contractors, subcontractors, product and building system manufacturers, government agencies, and nonprofits.

Leaders from within each of these sectors participate in the development of the LEED Rating System and the direction of the Council through volunteer service on USGBC's open committees.


If you would like more information, please do go ahead and drop me an email at
janeAnne@janeAnne.com


my company Eco-STEWARD Realty, Inc. here in the Western North Carolina Appalachian mountains specializes in "green" transactions . We are happy to offer experience and resources for those of you who are interested in sustainable/stewardship property ownership.

more at www.janeAnne.com


Monday, October 11, 2004

TABLE OF CONTENTS 

Table of Contents (shown in chronological order)


ATTITUDE and the 1031 Exchange Real Estate Investor
You CAN Use Your IRA to Invest in Real Estate in North Carolina
4 BASIC RULES of 1031 Exchanges
Asheville's GREEN BUILDING Council
1031 Tax-Deferred Exchanges and the SPECIAL QI (continued)
Save the Gray-Haired Agents, a 1031 Specialist's Lament
news~ MORTGAGE RATES EASE
1031 and NEW Ways to Build
1031 Exchanges & The Role of The Qualified Intermediary
1031 exchange FAST FACTS links!
WHAT is Section 1031 of the U.S. Internal Revenue Code All About?
The 1031 Exchange: An Intriguing Perspective and Examples

ASHEVILLE: #1 for Investing in a Second Homes
Attention Condo Buyers/Investors

B&B FOR SALE ~Asheville
WHAT TYPE OF B&B IS FOR YOU?
THE B&B BUSINESS PLAN

YOU Can Create a Land Legacy
ECO-VILLAGES in the Greater Asheville Area
ENVIRONMENTAL STEWARDSHIP

Who Represents YOU in a Real Estate Transaction?

FAMILY DESTINATIONS in the Greater Asheville Area
HORSE FARMS and EQUINE PROPERTIES
THE ORGANIC COMMUNITY GARDEN AT A PRIVATE COMMUNITY NEAR ASHEVILLE
THE OLD GROWTH FOREST PRESERVE AT A PRIVATE COMMUNITY, Burnsville, North Carolina
A PRIVATE COMMUNITY, A COUNTRY CLUB , AND MOUNTAINTOP VILLAGES

INCENTIVES FOR HOMEOWNERS INSTALLING RENEWABLE ENERGY SYSTEMS
Building Bridges from Today to Tomorrow

WANT TO OWN A B&B? Is inn-keeping for YOU?

QUALIFYING FOR A 1031 EXCHANGE (1031 Like-Kind Exchange)
1031 LIKE-KIND EXCHANGE and the QI
BENEFITS OF THE 1031 LIKE-KIND EXCHANGE


INTERVIEWING A REALTOR How to Find THE "Right" ONE for You

FROM A HILLTOP OVERLOOKING THE RIVER A narrative on life in Western North Carolina
ENVIRONMENTALLY SENSITIVE DEVELOPMENT in the Asheville Area
Preserves and Land Conservancies

HOME ENERGY RATING Good information for the home buyer
EXCEPTIONAL PROPERTIES Amazing tracts of land, land trusts, land preserves and spectacular properties require
"special caring"..SO when you choose a REALTOR to represent you in such transactions look for that person special person!

CLUSTER HOUSING AND LARGE TRACTS OF LANDS
Interesting information on this form of developmentWith follow-up notes from our readers
LAND FOR INVESTMENT Residential, farm and estates, vacant land, mountain getaways, 1031 Like-Kind Exchange1031
LIKE-KIND EXCHANGES an Overview for You
LOOKING FOR 1031 LAND FOR INVESTMENT? A word or two about my philosophy that YOU shall be served well ...
FYI: MADISON COUNTY, NORTH CAROLINA
For those of you who have discovered the lands I love, (and where I am a "Green REALTOR, ) here is some info...

LAND BUYS THAT LOOK TO THE FUTURE About the work The Nature Conservancy has done around the Greater Asheville area that
YOU can participate in PRESERVES AND PROTECTED LANDS IN NORTH CAROLINA
About the protected beautiful sites across N.C. including one within hours of Asheville, MOUNT MITCHELL.

THE CONTINUING SAGA OF THE LITTLE HORSE FARM NEAR ASHEVILLE, NORTH CAROLINACOULD THIS BE A PLACE FOR A THERAPEUTIC RIDING CENTER?Horse farms and Equine Properties For Sale Around Asheville are my specialty. Read a story about one here.
MORE ON THE FAMILY HORSE FARM Near Asheville~ Possible Use for Retired Horse Lovers-A Business for Retired Horses!
HORSE FARMS FOR SALE, HORSE FARMS FOR SALE, Oat Oh! I'm thinking maybe I should buy one near Asheville! Horse Farms and Equine Properties For Sale Around Asheville Are Magnetic!

THE NATURE CONSERVANCY'S "CONSERVATION BUYER" PROGRAM
A group of folks I know who are REALTORS here in the Asheville area are also great lovers of nature. More on "Green Realtors here.
TO BE RATHER THAN SEEM....." "The North Carolina state motto is Esse Quam Videre, which means "To Be, Rather Than To Seem."

Sunday, October 10, 2004

ATTITUDE and the 1031 Exchange Real Estate Investor 

1031 Exchange Investors Risk the "Misty Climb"

My dogs and I have a habit of making the climb to the top of the ridge each day. On a sunny day, you can see all the way to Hot Springs Gap from up there, and at this time of year, the valley below is beginning to paint itself in the remarkable colors of Fall. From this vantage point, you are sure that there's no place like Asheville, North Carolina --and especially at this time of year.

This morning the mists were cloud-thick, but we set out into the swirling masses anyway knowing that the mysterious atmosphere produced a perfect backdrop for adventure. The flow of inspiration was nearby...

The dogs explored the nuances of the rocky road. They rooted out a chestnut or two, chased a squirrel up a tree, and finally came to stand, tails wagging, on the very edge of the ridge where it overlooks a sharp descent from the cliff above. As I joined them, the mists cleared and the Carolina blue sky rewarded my effort to reach the top.

I asked myself how many of us get a chance to enjoy life at this level each day? And then I thought of my clients, the folks who become investors in and stewards of the land . They are doing this day after day, on their climb to the "top of the ridge".

1031 Exchange investors decide what they want to accomplish, and head out on the trail.

They find "chestnuts"-- a REALTOR with whom they can communicate to help them with property selection, determining values, prices and terms. They gather together a team. Besides their REALTOR, there’s a financial analyst, a banker or two, or three… a tax advisor, legal advisor, and a Qualified Intermediary all of whom understand the 1031 Like-Kind Exchange process. And it's true. they will probably chase a few "squirrels" up trees along the road.

Yes, indeed. It IS a thrilling climb.

Kudos to you for taking the time and effort to “sniff out your territory” and may your successes be many.

Please let me know how your climb is going. Visit my web site:
www.janeAnne.com


Friday, October 08, 2004

You CAN Use Your IRA to Invest in Real Estate in North Carolina 

You CAN reap tangible benefits this year with hands-on management of your self-directed IRA!

Think of your IRA as a Harvest Bowl.

It is a vessel into which you can place what is attractive to you, even round it out “fruits” other than stocks, bonds and mutual funds. Consider real estate, for example— raw land, historic properties, condos –- all to be found in abundance here in our North Carolina Appalachian mountains. If you want to broaden your IRA portfolio, the Greater Asheville area is an excellent harvesting field, with EscapeHOmes.com reporting ASHEVILLE, N.C. as being #1 for investing in second homes: http://www.escapehomes.com/cities/Asheville/

And think of it this way; investing in real estate has certain benefits:

First of all, you can see it and touch it!

You can leverage this investment if you choose

The potential of a cash stream as well as market appreciation exists with income properties

You know WHERE it IS.

You can use an IRA for real estate investments whether you are a “ hands-on” kind of person or an investor who prefers relying on someone else's expertise. I recommend that you take the time to decipher the KIND of fruits and veggies you want to put in your Harvest Bowl, and that you also do some solid research into self-directed IRAs prior to making selections.

NOTE: To buy real estate you may have to find an independent administrator to serve as a trustee or custodian. If you choose to hire an administrator, you will want to talk to several experienced professionals before making your final selection.

Consider a self-directed Roth IRA for your real estate investments. And understand that there ARE IRS hurdles involved. The government has a lot of rules when it comes to using retirement funds for real estate, for example, the IRS allows you to use your land or building investment, but not while it is IN your IRA. You could buy a second home, rent it to someone else, put the rental income in your IRA, but not live there. When you retire, you would take the house as a distribution. Then you can move in. By the way, in the meantime, you can’t rent the house to your spouse, grandparents, parents, children, grandchildren, etc., but you could rent it to your brother or sister while it's in your IRA.

Usually we suggest to our clients that the IRA is best when used for true investment property. Here is where your accountant or financial consultant can be a big help. S/he can do a good bit of the homework for you in terms of research.

Contact us at www.janeAnne.com to discuss broadening your IRA investment plan.





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