Sunday, July 23, 2006
Asheville Real Estate 1031 INFO
Asheville Real Estate Journal
7 "DON'Ts" All 1031 EXCHANGERS Should Know
Over my the years in the practice of real estate in the Greater Asheville area, I have seen strong gains in the real estate market. During that same time, I have noticed with interest the number of clients I meet here in the Asheville area who are approaching retirement -- "baby boomers" seeking the welcoming embrace of this area, and soon ready to let their wealth flower for coming generations.
Interestingly, just in the past few years, the demand for 1031 Tax Deferred Exchanges has also "bloomed". More and more of my clients want to know whether they can qualify their vacation homes and secondary residences for an Exchange. Although I have done many successful 1031 Exchange transactions, and have taken advanced training in this subject area, I am NOT an expert on the intricacies of the tax code.
I like to refer my clients to those who are experts for details about the mechanics of the 1031 Exchange, especially in terms of Vacation Homes. (In order to conduct a valid 1031 Exchange it generally is necessary to have such property rented to unrelated parties for a period of time both BEFORE and after the exchange, for example.) In making sure a Property actually qualifies for the 1031 requirements INTENT is all-important. In this regard, there are many details that a Qualified Intermediary explains and handles.
As your real estate professional, I CAN help in certain details however.
I CAN advise you NOT :
1) To inadvertently indicate in a Contract that you intend to live in the property,
2) To sign a listing agreement soon after its purchase,
3) To apply for “owner occupied” financing on the property,
4) To move into that property within a specified period of time,
5) To ignore rental history (it must be rented by its tenants for a significant time)
6) To claim the "mortgage interest" deduction for the property on yours tax return,
7) To treat a 1031 investment property as a "time-share" arrangement. Section 280A of the Tax Code spells out the Test. Personal use of the property may not exceed the greater of: 1. Fourteen (14) days; or2. Ten percent (10%) of the number of days that the property is rented at fair market value to others.
My clients like to consider the purpose for which they will be using an investment property. I ask them to be aware that in order to qualify for Section 1031 treatment., the purpose for holding the property must be for investment or business use.
Please check out more information at
www.janeAnne.com
There a small library of related INFO there!
Let me know if you need a referral to a Qualified Intermediary. I have taken the time personally to interview a number of QIs and have excellent references from satisfied clients to share with you.
contact me at ECOinvest@janeAnne.com
####
Asheville Real Estate Journal
7 "DON'Ts" All 1031 EXCHANGERS Should Know
Over my the years in the practice of real estate in the Greater Asheville area, I have seen strong gains in the real estate market. During that same time, I have noticed with interest the number of clients I meet here in the Asheville area who are approaching retirement -- "baby boomers" seeking the welcoming embrace of this area, and soon ready to let their wealth flower for coming generations.
Interestingly, just in the past few years, the demand for 1031 Tax Deferred Exchanges has also "bloomed". More and more of my clients want to know whether they can qualify their vacation homes and secondary residences for an Exchange. Although I have done many successful 1031 Exchange transactions, and have taken advanced training in this subject area, I am NOT an expert on the intricacies of the tax code.
I like to refer my clients to those who are experts for details about the mechanics of the 1031 Exchange, especially in terms of Vacation Homes. (In order to conduct a valid 1031 Exchange it generally is necessary to have such property rented to unrelated parties for a period of time both BEFORE and after the exchange, for example.) In making sure a Property actually qualifies for the 1031 requirements INTENT is all-important. In this regard, there are many details that a Qualified Intermediary explains and handles.
As your real estate professional, I CAN help in certain details however.
I CAN advise you NOT :
1) To inadvertently indicate in a Contract that you intend to live in the property,
2) To sign a listing agreement soon after its purchase,
3) To apply for “owner occupied” financing on the property,
4) To move into that property within a specified period of time,
5) To ignore rental history (it must be rented by its tenants for a significant time)
6) To claim the "mortgage interest" deduction for the property on yours tax return,
7) To treat a 1031 investment property as a "time-share" arrangement. Section 280A of the Tax Code spells out the Test. Personal use of the property may not exceed the greater of: 1. Fourteen (14) days; or2. Ten percent (10%) of the number of days that the property is rented at fair market value to others.
My clients like to consider the purpose for which they will be using an investment property. I ask them to be aware that in order to qualify for Section 1031 treatment., the purpose for holding the property must be for investment or business use.
Please check out more information at
www.janeAnne.com
There a small library of related INFO there!
Let me know if you need a referral to a Qualified Intermediary. I have taken the time personally to interview a number of QIs and have excellent references from satisfied clients to share with you.
contact me at ECOinvest@janeAnne.com
####
Asheville Real Estate Journal
