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Equity Advantage 1031 Exchange
United States
Приєднався 30 чер 2017
Equity Advantage is a full service 1031 exchange facilitation service handling delayed, simultaneous, reverse and improvement exchanges for both real and personal property.
We at Equity Advantage pride ourselves on our expertise and our ability to get the difficult deal done. While we have been in business since 1991, it is the technical knowledge we have that sets us apart. It is this knowledge the the tax and legal communities look to when difficult questions arise. Rarely is it a question of whether an exchange can be accomplished, more often that not it's a question of how it can be accomplished.
For any questions or inquiries give us a call today!
503-635-1031 or 1031exchange.com
We at Equity Advantage pride ourselves on our expertise and our ability to get the difficult deal done. While we have been in business since 1991, it is the technical knowledge we have that sets us apart. It is this knowledge the the tax and legal communities look to when difficult questions arise. Rarely is it a question of whether an exchange can be accomplished, more often that not it's a question of how it can be accomplished.
For any questions or inquiries give us a call today!
503-635-1031 or 1031exchange.com
Team Equity x the Willamette Valley Jetboat
An afternoon out with the Equity team! Making the best of this 90-degree weather with the Willamette Valley Jetboat 🚤 be forewarned - this is not for the weak!
Here's to our survivors.
#1031exchange #ourteam #jetboat #EquityTeam #willamettejetboat #willamettevalley #summerfood #portland #portlandnw #portlandoregon
Song is "Summer on the Inside" by Warner Case found here: music.apple.com/us/album/summer-on-the-inside-single/1692607400
I do not own the rights to this song.
Here's to our survivors.
#1031exchange #ourteam #jetboat #EquityTeam #willamettejetboat #willamettevalley #summerfood #portland #portlandnw #portlandoregon
Song is "Summer on the Inside" by Warner Case found here: music.apple.com/us/album/summer-on-the-inside-single/1692607400
I do not own the rights to this song.
Переглядів: 38
Відео
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How fun!
Can you do a 1031 exchange on new build
Assuming we are talking about selling a property that you just completed. Section 1031 applies to property that has been held for investment and is acquired with the intent to be held for investment. Intent is more important than time and life events can impact holding periods. Call us to discuss your situation!
Thanks. Complicated ... but that's the IRSs way. Simple example - I have a rental property acquired via 1031. After 5 years, I convert to primary residence for 5 years. If I sell, then I get qualified use of 5 yrs as a share of 10 years of total holding - so I get 50% of the 250K or 500K?
hey! great explanation by the way. so, in an exchange, my new property doesn't equal the value of the relinquished property. however, my new property costs more than my net profit from the relinquished property. how does the irs view this? hopefully my question makes sense. thank you!!
Thank you for watching! And good question. Profit or gain really has nothing to do with what has to be spent in an Exchange. It just tells us when an Exchange ceases to make sense. In order to be totally tax deferred, one must meet what we call "The napkin test" which simply states you must go across or up in value and equity. Both numbers are net of closing cost, not the gross to be totally deferred! Another way to look at it is every dollar spent overt your basis, represents tax-deferred gain.
@@1031ExchangeExperts thanks for the quick response!!
doing a 1031 exchange ... selling in Ca buying 3 homes in Ga im now short 150k the owner was going to hold a note for 2 year now wants to cashed out... now Im looking for a short term loan to close the deal.... this loan will be 1 year since its hard money.... I dont not flip in 1 yr I may sell and payoff the hard money and do another 1031 home without any loans, thoughts?
You can do an exchange and pay off the note but you will have to come out of pocket the extra money needed to satisfy the exchange. Please take a look at the Klarkowski court case, Dealer Status flyer that is available on our website. On the debt, if the property is encumbered it’s going to be paid off upon close. Whatever that debt is, will either have to be replaced in the new property or offset with cash out of your pocket. Otherwise to buy outright would mean you are going down in value in the amount of the previous loan, which would trigger tax.
How do you "co-partner" with the developer?
Hello, thanks for the excellent video! I am selling a commercial building for 3 million. Outstanding balance on loan is 1 million. Original purchase price was 2 million. I’m looking at a replacement property at 1.245 million and would like to be debt free, so no new mortgage. Can you break down my tax liability? Will there be mortgage boot or debt relief if I pay for the replacement property in full using a 1031 exchange? Any thoughts if this is worth doing an exchange or should I consider just cashing out and buying the replacement property with after tax dollars? Any direction you can provide would be greatly appreciated!
Damon, the 1031 Exchange is not all or nothing. Think of the Exchange from the perspective that every dollar spent on the Replacement in excess of the Relinquished Property’s Tax Basis represents deferred gain and therefore deferred tax. To be totally tax-deferred the Exchangor must go across or up in Value and Equity. The Value and Equity numbers are net of closing costs such as Broker’s Commission, Title/Escrow Fee’s, our fee, Tax/legal fees and property tax prorations. If the numbers don’t quite cover, you simply have tax exposure on the difference. Here’s a short video on the topic from our UA-cam channel: ua-cam.com/video/tm6__V8KY18/v-deo.html So, using your numbers relinquishing a property for $3m and acquiring a Replacement of $1.245 you would have tax exposure on the difference between the $3M(net of closing costs) while the only gain receiving tax deferral is difference between the Basis and the $1.245. So, if the Basis on the Relinquished Property was $800k and you bought at the $1.245 you would defer the gain the $445k($1.245M-$800k). The tax exposure would be Federal at 20% on Appreciation and 25% on Depreciation Recapture, State Tax on top and finally 3.8% Healthcare tax. These rates are assuming long-term “held for investment” rates… I encourage a call to our office for a more detailed discussion of your situation!
6:52
Lenders typically do not favor improvement exchanges because they require us (your custodian) to take ownership of the property.
How much should an exchange company charge for a 1031 exchange?
The fees for a 1031 Exchange can vary widely depending on the complexity of the transaction, value of the properties involved, and the specific services provided by the Exchange company. In this space - you get what you pay for!
so i added a new roof and painted the apt and now wanting to pay the contractor at closing... it is a boot... in order to avoid paying taxes on this boot , I would need to get another loan from a bank once the 1031 is completed can closed
If you are taking advantage of the 1031 Exchange for tax-deferral, the money you put into the property for repairs prior to selling will be considered equity in the property. You are correct that any invoices paid at closing for work done will be taxable as Boot. After the exchange is completed, you can apply for a cash-out refinance on the new replacement property to help replenish the funds. Always talk with your tax advisor as to how long you should own the property prior to applying for the loan!
I forgot to take notes.
Maybe I need a 2024 HP 12C because mine comes up with a negative cap rate. Assuming a 400k mortgage say on a 500k house at 8 percent 30 yrs the 12C says 2935 a mo not including prop taxes ins maint etc. Maybe can rent for 2500 a month on a 500k house here. So thats a negative cap rate. Take the 500k at 5 percent APR CD make 2k a month sitting around watching grass grow. Worse that 500k house likely will drop to 400k cause thats more like what it should sell for, maybe.
Thank you for watching! Please let us know how you liked this Mobile Home/RV Park series, and what you want to see next.
Thank you for watching! Let us know if you have any questions or comments below.
Explore more Opportunity Zone investing videos on our channel and share your thoughts below!
I suspect that messing around with renting my primary residence in order to avoid long term capital gains on a third of the sales price is a waste of time and a hassle. Also given the real estate market likely to cost me in terms of declining price along with wear and tear. I think a buyer will maybe be all cash but probably not 2/3 down and I carry the last third. More likely they are broke and minimum down and wanting concessions. Having no state tax in WA means I may owe 30k fed ltcg on 200k gain after expenses. Hell will be lucky to sell at 750k.not really the view is to vie for. Ok I rambled.
John! Thanks for checking in though I'm not clear on what is being asked. It's no problem converting a Primary Residence to Investment and the property does not have to be rented, it must simply be held for investment. As you stated, the "seasoning period" could have adverse price consequences though with our wonderful inflation you'll likely have price increase with corresponding decrease in buying power, it's a wonderful world at the moment. If you look at our youtube library there are several videos on the conversion topic and as a regular, you likely are already aware of that. Please do not hesitate to give me a call to discuss.
Thanks for your reply. Basically I have 250k basis (pun intended) and IRS 121 is 250k single exclusion so the question becomes if I sell say 750k net 700k I have 200k to play with or just pay tax on.
Thanks guys.
Thank you all for watching! Submit your questions here and we will get you an answer as soon as possible.
Have a question you would like covered? Ask it HERE and we will get to your topic next!
I was screwed recently by FEMA at my property in OREGON. What was not flood plain now is flood plain I think its the X or 100 year designation. Anyway my thought is why develop and even single wides like I have there on one lot are pricey. I do like tuff sheds and no permits under 200 sf. Well to the question if I do just RV parking say vs RV park does that make sense? Then people can leave their RVs there and if they want to stay say 30 days total a year you are not really letting them live there just vacation type stuff. I could provide water septic and garbage. Anyway its a concept but in OR dreams are routinely turned to nightmares.
@@JohnDoe-np3zk we have a response from our Expert, Mark! "Historically, some properties in floodplain areas of Oregon have been approved for various RV and Campground use especially on navigable rivers. Each property in Oregon has its own approval process. Some communities require an alternate location that is out of the flood plain to move RVs in the event of a notified flood risk and some properties are only allowed to be open when there is no historic flood risk say for 6-9 months of the year. The question is, “What do you want any approvals and improvements to the property to accomplish for you and your family?” Is a goal for cash flow where holding the property until an alternative use is allowed or is it to improve the property to an RV park, season it with tenants, develop historic NOI, and then sell? Developing for an eventual sale requires knowing how long the property is allowed to be used for RV (with some restrictions) and providing at least water and power to a site (otherwise you have dry camping). I have sold properties in West Coast states that did not have sewer or septic and required holding tanks to collect wastewater, affluent, and solids from RVs and any publicly used on-property amenity that is required to be pumped out regularly and has a separate expense. These are identified as camping in some jurisdictions. If your site is unique it may be worth doing a feasibility study to determine if your property should be fully improved ($15,000 to $40,000+ cost per site depending on improvements and amenities) and if the sites can be rented (seasonally or year-long) to achieve a reasonable rate of return. As mentioned in the interview with David, RV sites are being developed in many communities around the USA (even in high flood-likely states along the Gulf Coast and major US rivers) for long-term resident stays and used by communities to meet their low-income housing quotients." Thank you for the comment and please let us know if you have any other questions.
Thanks for your detailed reply. My site is along the creek with a Mt. Hood view and dead end road. I have a single wide on one of 3 lots that has septic. The other two lots I was planning on adding community water and underground power as both are "right there". There was a detailed soil evaluation done before I bought it. I would just do septic on each lot with a drain field rather than just a holding tank. If septic an expensive type system needed then maybe just a holding tank. As to my goal these initial steps would open perhaps small houses vs an RV park or some RV parking as well. The 200 sf no permit reqt opens up less expensive buildings. Thanks again for your reply.
You are looking great, Mark!
Yes he is!
Let’s say original property was 1M with 500k mortgage. New property 1.3M with 800k mortgage. All sales proceeds were used to purchase more expensive property. Is anything taxed? Is the increased mortgage taxable?
Thank you for your question! In the scenario you described, the Exchangor is going across or up in value, equity and debt, so all capital gains tax would be deferred. The increase in mortgage is NOT taxable.
Thank you!
😃 Promo'SM
What’s the most devastating consequence of investing into a 721 UPREIT? Are there some pretty bad actors out there in this sector? And if a person wants to find the best of the best to work with with great integrity and track record, where do we go to look to such organizations that oversight?
Clas Azul for the win!
You can say that again!
Is a seller affected in any way by selling to a buyer that is in the 1031 tax deferred exchange?
Great info!
We will keep it coming, thank you for watching!
Useful information!!
Thanks for watching Tricia!
I learned something there.
Thank you! Stay tuned for more.
Tina has done it again 👏
Tina you are a wealth of knowledge!
Unless you already know this stuff, it's impossible to follow. Between the speed and the jargon, it's not helpful to me.
I highly encourage you to call in and get on the phone with one of our exchange coordinators! The webinar above is an advanced 1031 class we put on for brokers who already have a base knowledge in this area. For something slower please check out our basic class with Tina Colson-Jones, or her series of SHORTS or give us a call! We will be able to give you a much more precise and customized explanation of your situation and options.
So additional cash could be a loan from the bank, and I put 30% down on my new like property?
What happens to the fund after deposited to the trust? Stays in cash? Can be invested again? Who decides and who manages that?
Mortgages are for losers.
Thanks lots of nuggets.
Great info👍
Such important information! Thanks!
I'm saving to start building a new primary residence every few years. Start modest and keep building upgrades. Live in the home 2-3 years, build the next one, move in, sell the first one use the 121 exclusion. Roll profits into the next build. Keep upgrading till I'm making $500k profit on the sales.
121 is not an Exchange, it is straight exclusion of gain on the sale of a primary residence. A property lived in as a primary residence for 2 out of the preceding 5 years qualifies and entitles an individual the $250k exclusion on gain while a married couple receives $500k exclusion. You can do this once every two years!
@@1031ExchangeExperts, ment to say exclusion... Friggin auto correct.
Thank you Tina!
thank youuuuu!
Thank you for tuning in!
Thanks for the explanation🙏
Thank you for watching! Let us know if you have any questions.
You mean you actually understood what he's talking about? Seriously?
Educational as always!
Great advice about planning ahead!
Im selling a rental for $203,000. Original loan was $87000. The new property would be $90,000. Is it still worth doing a 1031 exchange?
Hello Mike! If you sell your relinquished property for $203,000 and acquire new property for $90,000 in a 1031 exchange, you would have approximately $113,000 in “boot” which would be taxable. The amount of the loan is irrelevant in this calculation. To determine if a 1031 exchange is worth doing, you will need to know the amount of your gain that you will owe capital gains taxes on if you were to sell without doing an exchange. You can use this calculator to estimate but it is always best to consult your tax professional: Capital Gains Calculator www.1031exchange.com/calculators/ If your gain is similar to or less than the $113,000 of taxable boot in the above scenario, it would not be worth doing a 1031 exchange.
My base price after depreciation cost would be around $60,000. So my gain would be $143,000 without doing the 1031 exchange.
Do you need to put the property into the trust first or can the owner sell the property and put the capital gains into the trust? Does a primary residence qualify or only investment properties?
Hello Roberta! First - to qualify, the property will need to be debt free. The property will need to be placed in the trust prior to sale. If your primary residence is debt free, I believe it will qualify. To set up a charitable remainder trust, you will need to reach out to the 501(c)(3) charity of your choice or an estate planning attorney.
Thanks for the tips on navigating these crazy times 🙏
Thank you for watching! Hopefully now you can let the good times roll.
Thanks for sharing your knowledge!
Thank you for the support!
So timely in the context of the current market!
Thank you for watching Tricia! Stay tuned for seller financing PART 2!
Very informative as always🙏