Taking the Alabama exam for the 3rd time tomorrow, there’s one question about the 1031 tax exchange . So Im looking for the examples of it to get that question right .! Need one more question right to pass .
What if they have already bought a new property? They want to sell an old one. Can they use a 1031 and pay off the new one. Or does the replacement need to be purchased after the sell of the original property? I hope my question makes sense
If they already have a new property, they're not "exchanging" the old property to own it. You cannot defer capital gains tax. 1. Sale of investment property 2. Identify like-kind property 3. Close on identitfied property These are the order of the steps, not 3, then 1 & 2.
So basically let say you put down 20% on a 100,000 property. 20,000 on the 100,000 property is need to acquired it, now there will be a mortgage that needs to be paid. Let say 5 years later, the property appreciates and goes from 100,000 to 120,000, there is a 20,000 gain. Let say i sold the property at 130,000 and reinvest it in a similar property, i wont be taxed? is that right?
The lender gets their money first. In five years you'll likely still owe $80,000 to the lender. If you use any earnings from the sale of the house to pay off the mortgage...you will be taxed. To avoid it, you have to "rollover" the mortgage, debt-wise. Meaning...FIRST you pay off the lender, and whatever is left you can defer. This is because of a "due-on-sale" clause most lenders have in the terms of a mortgage. If anything is leftover, that's what you have to play with **unless** you also got another pre-approval before the exchange. Which you need to do anyway, to avoid capital gains. What you use from the pre-approval loan needs to be equal or GREATER to the "due-on-sale" amount you paid the previous lender.
For example at the end, if someone purchases 10M property with previously sold property capital and sells it for 11M and don’t want to invest anymore, is capital gain 1M (300k tax) or are the profits since beginning are subjected to taxation?
Andrew owns an office building with a depreciable basis of $1,245,500. Using the straight-line method, what is the allowable annual depreciation of Andrew's building...? $45,365.87 (Dollars) $31,935.90 (Dollars) $32,435.54 (Dollars) $45,272.73 (Dollars) can You help me please with this ?
One of your video was saying that it takes 205 days to acquire (45+180 days) and this is saying only 180 days to acquire (45 days are inclusive) which one is true ?
This was so helpful! At 1:10 when you say tax-deferred exchanges cannot be used for personal properties, that's meaning you are not able to live there? What options do you have?
These animated videos are incredible man. Thank you and God Bless You.
"Like a cookie!" 😂😂😂
the way he pronounces it was so funny😂
Great job Joe! You have made it very simple to understand and will give people a leg up on understanding how to keep their wealth growing! Good job!
Now that was great info & imagery! Love it! Thanx Joe!
Great graphics and straightforward explanation! Thank you Joe!
Very Informative & Well Explained.
Concise & Simple.
Thank You.
Kadeers!!!
I actually love you. You are helping many people man, Thank you.
Thank you for the kind words
Taking the Alabama exam for the 3rd time tomorrow, there’s one question about the 1031 tax exchange . So Im looking for the examples of it to get that question right .! Need one more question right to pass .
This is wonderful, thanks for the info!
Thank you Joe for this helpful video.I appreciate it❤️😇🙏🏻🇺🇸
This is AWESOME!
imagine a $280,000 dollar cookie
Hello Prepagent, can you please elaborate more on what a loan to value ratio?
What if the property that you want to buy is worth less than the one you are going to sell ?
Awesome vid. Keep the good work up.
What if they have already bought a new property? They want to sell an old one. Can they use a 1031 and pay off the new one. Or does the replacement need to be purchased after the sell of the original property? I hope my question makes sense
If they already have a new property, they're not "exchanging" the old property to own it. You cannot defer capital gains tax.
1. Sale of investment property
2. Identify like-kind property
3. Close on identitfied property
These are the order of the steps, not 3, then 1 & 2.
It can not be personal. Meaning it cant no be a singke family house? Doez it has to owned by a company?
The GOAT!!!!!!!
So basically let say you put down 20% on a 100,000 property. 20,000 on the 100,000 property is need to acquired it, now there will be a mortgage that needs to be paid. Let say 5 years later, the property appreciates and goes from 100,000 to 120,000, there is a 20,000 gain. Let say i sold the property at 130,000 and reinvest it in a similar property, i wont be taxed? is that right?
The lender gets their money first. In five years you'll likely still owe $80,000 to the lender.
If you use any earnings from the sale of the house to pay off the mortgage...you will be taxed. To avoid it, you have to "rollover" the mortgage, debt-wise.
Meaning...FIRST you pay off the lender, and whatever is left you can defer. This is because of a "due-on-sale" clause most lenders have in the terms of a mortgage.
If anything is leftover, that's what you have to play with **unless** you also got another pre-approval before the exchange. Which you need to do anyway, to avoid capital gains. What you use from the pre-approval loan needs to be equal or GREATER to the "due-on-sale" amount you paid the previous lender.
For example at the end, if someone purchases 10M property with previously sold property capital and sells it for 11M and don’t want to invest anymore, is capital gain 1M (300k tax) or are the profits since beginning are subjected to taxation?
Thats a good question lol hopefully he sees it and answers back
Andrew owns an office building with a depreciable basis of $1,245,500. Using the straight-line method, what is the allowable annual depreciation of Andrew's building...?
$45,365.87 (Dollars)
$31,935.90 (Dollars)
$32,435.54 (Dollars)
$45,272.73 (Dollars)
can You help me please with this ?
So it doesn't work for a primary residence ?
One of your video was saying that it takes 205 days to acquire (45+180 days) and this is saying only 180 days to acquire (45 days are inclusive) which one is true ?
180 days total.
This was so helpful!
At 1:10 when you say tax-deferred exchanges cannot be used for personal properties, that's meaning you are not able to live there? What options do you have?
Personal property meaning anything that is not real estate.
My man Joe loves his cookies. Lol
Can you move into a 1031 home after some time?
I dont understand the 520$
I bet there's a lot of people who love Joe