1031 news

Selecting the Entity for a Real Estate Purchase – Limited Liability Companies

In our fourth and final installment of our continuing series on entity selection for owning real estate, we will address the business and tax law considerations concerning limited liability companies.

What is a Limited Liability Company?

Limited liability companies (LLCs) are the most popular choice of organizational form because of the inherent flexibility in most state statutes that enhances the ability of the entity to adopt features that best serve its objectives.

Joseph Lane Named Vice Chairman of Napier Park

Accruit board member Joseph Lane was named vice chairman of Napier Park Global Capital and appointed to the firm's leadership team as a member of the Management Committee.

A managing director in Napier Park's Real Assets group, Joe has over 35 years of experience in financial services. He has previously served as CEO of GE Technology Finance and as president of IBM Credit Corporation. Joe has been director and chairman of the Equipment Leasing and Finance Association (ELFA), and chairman of the Equipment Leasing and Finance Foundation. He was elected to the Equipment Finance Hall of Fame in 2015.

Selecting the Entity for a Real Estate Purchase – Corporations

In the first part of our series concerning entity selection for owning real estate, we addressed sole proprietorships and tenants in common. In part two, we addressed the business and tax law considerations of partnerships. In this installment, we consider the business and tax law aspects of corporations.

Trusts, Wills, Probate & 1031 Exchanges

Property ownership is often held by various kinds of trusts. Each type of trust exists for its own special purposes and is governed by different legal principles. These trusts can be confusing and so too can be their interrelationship with wills and probate. Sometimes property sold as part of a 1031 tax deferred exchange involves trust ownership. This blog will attempt to clarify some of the confusion and touch on how various types of trust-holding impacts completing a 1031 exchange.

Selecting the Entity for a Real Estate Purchase – Partnerships

In the first part of our series concerning entity selection for owning real estate, we addressed sole proprietorships and tenants in common. Here we examine the business and tax law considerations concerning partnerships.

Are Opportunity Zones a Tax Deferral Alternative to 1031 Exchanges?

With the passage of the Tax Cuts & Jobs Act (TCJA) in December 2017, we saw the elimination of Section 1031 exchanges for all types of property except real property. Included within the TCJA is Section 1400Z-2 which established an incentive for investing in Opportunity Zones (O-Zones). Recently, I have spoken with a number of taxpayers who have heard about Opportunity Zones and want to know if they are a viable alternative to a 1031 exchange. My answer is usually “it depends.” Here, I provide an overview of opportunity zones and their differences from 1031 exchanges.

Non-Safe Harbor Parking Arrangements for 1031 Exchanges

Accruit performs many safe harbor reverse exchanges (also known as parking arrangements) for taxpayers. The safe harbor transactions fit within the parameters of the safe harbor created in September 2000 by Revenue Procedure 2000-37 and governs those transactions in which the property is parked no longer than 180 days. However, there are instances in which, for a number of reasons, the replacement property must be parked for longer than 180 days. Common examples are those in which the relinquished property will take longer to market and sell than 180 days or in which construction of improvements are required on the replacement property.

Infographic: 10 Steps of a Reverse Exchange

View the entire 10 Steps of a Reverse Exchange Infographic here.

Accruit, LLC is a national provider of Qualified Intermediary (QI) and Exchange Accommodation Titleholder (EAT) services for simple and complex exchanges. Accruit handles all types of real property like-kind exchanges. Specialized EAT services are provided by Accruit Exchange Accommodation Services LLC.

Seller Financing in a 1031 Tax-Deferred Exchange

In a sale of real estate, it’s common for the seller, the taxpayer in a 1031 exchange, to receive money down from the buyer in the sale and to carry a note for the additional sum due. The taxpayer facilitates financing for the buyer in this way to make the transaction happen. Sometimes this arrangement is entered into because both parties wish to close, but the buyer’s conventional financing is taking more time than expected. If the buyer can procure the financing from the institutional lender before the taxpayer closes on their replacement property, the note may simply be substituted for cash from the buyer’s loan. Regardless of the circumstance for seller financing, without further steps, the taxpayer’s use of the value of the note toward the purchase of the replacement property will be taxable.

The Tax Cuts and Jobs Act of 2017 and its Effects on 1031 Exchanges

The Tax Cuts and Jobs Act of 2017 (TCJA) that took effect on January 1, 2018 was a major overhaul of the Internal Revenue Code. Late in 2017, while changes to Section 1031 were being contemplated by Congress, Accruit posted this blog article concerning some of the proposed amendments or even total repeal of Section 1031 being contemplated in Washington, D.C. and the potential adverse effects on tax deferred exchanges.
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