Posted on February 11, 2015 | By Victoria Hall | Leave a response
Accounting is really not all about numbers. This may be a surprising fact about accounting and accountants. In reality, not all accountants love numbers. Some of them love the idea behind communicating a lot about numbers to people who know very little about their actual relationship with numbers. When it comes to accounting, you will definitely be surprised to know that it is an actual mixture of history, business economics and even tradition.
Every business requires a good accountant. When you don’t have a reliable accountant working for you, everything else that you need taken care of becomes unimaginable. Now before you settle for the first accountant you have talked to, here are some ideas of what a Calgary accountant should be:
- A Calgary accountant must be knowledgeable of the ins and outs of Calgary Corporate Tax. Because other countries or other states in Canada could have their own kind of tax laws, it is a must that an accountant based in Calgary actually understands all the nitty gritty details of accounting and tax in the area.
- A good accountant should be a good communicator too. Because he is the person in the middle of you and the numbers you cannot understand, he or she must be able to bridge the gap. Your better understanding of the tax and how it is computed should be the ultimate goal of every accountant.
- A good accountant will be able to show you a way of how you can save yourself from paying high taxes. This does not mean cheating on your tax payments, but more importantly, reallocate business funds to make it truly useful for the company.
- A good accountant must make you feel comfortable around them. Since you will be working with them all year long, they must be able to get you to feel comfortable to ensure that you are able to talk to them about all your business concerns. After all, an accountant is after all your partner in improving your business economics.
- A good accountant must have a license. Without this license, you can never really say that they are good enough. The license will be your constant reminder that they did undergo proper training and passed it too.
An accountant should be reliable and trustworthy. Keep these things in mind and go out and find yourself the best accountant the market has to offer.
Posted on February 5, 2015 | By Alex Maurice | Leave a response
It’s useless trying to get into the ‘hows’ of a divorce. Fact is women initiate seven out of ten divorces and it’s not difficult to see why divorce is such an inviting idea to them. They get to keep the kids, the house, the dog, the car and half or even more of the property. That’s not to say that a divorce doesn’t affect the woman. But you cannot avoid the fact that men end up with a very raw deal.
Mana The problem may not be with your former spouse – divorce has a tendency to turn otherwise good people into bloodthirsty vampires. And helping them is a skewed judicial system which ensures that women get the lion’s share of your assets. Divorce can be a dirty business – with the help of lawyers, your ex can easily play power games to gain an unfair advantage over you. Since the law isn’t going to change anytime in the near future, it’s in your best interest to ensure that you don’t end up holding the wrong end of the baton. Here are a few tips to help you get the better of your ex:
1. Prepare: Even before you file for divorce, you must prepare yourself emotionally and financially. This is going to be one of the biggest roller-coaster rides of your life and you must be ready for it. One of the first things you must do is get yourself a good divorce lawyer. With a capable lawyer, half of your battle is already won. Interview prospective lawyers to know more about your potential risks and how to avoid them. Once you and your lawyers have worked out a plan of action, you must organize your paperwork and keep it up to date.
2. List Your Assets: The next most important step is to list all of your assets. Most men are so busy slugging it out with their wives that they don’t realize the importance of creating an exhaustive list of all their assets. If you don’t know how much and what you own, how can you fight your ex. To begin your financial planning, gather all historical financial documents like tax returns, banking records, real estate purchase and sale documents and any other records that pertain to your assets. Ensure that this list of assets doesn’t fall into your spouse’s hands.
3. Role-play: This may sound funny but it can help you to overcome any roadblocks that you may face in the future. Take a friend or colleague into confidence and let them know what you plan to do. Next, practice different possible situations with them. This will help you anticipate and get past problems that may occur in the divorce proceedings.
4. Drain the bank: Now that you’ve prepared yourself mentally for the challenges ahead, it’s time to take action. If there are any jointly held bank accounts, withdraw all the money from these accounts and transfer the funds into an account in your name alone. Be careful not to divulge this secret to your spouse beforehand. Soon, you’ll be able to sit back and enjoy the fun as your ex-wife tries to handle the problems associated with covering the bounced checks.
5. Shred/ hide/ cancel credit cards: Your credit card is your weakest link. Ensure that your wife doesn’t take advantage of your card. Many wives have been known to use their husbands’ credit cards to purchase and stock up on personal items. Some of them even charge large purchases to the card. The husband is then stuck with the debt on the credit card as he probably had no idea about his wife’s sneaky ways. The best way to ensure you don’t fall into a similar trap is to cancel as many of your cards as possible. You could transfer the card to another issuer but make sure that your wife doesn’t know about this change. Once that is done, hide your card to ensure that your wife doesn’t have access.
6. Starve your spouse: If you want to settle the divorce on your terms, starving your spouse is the best method available. First, if you are the sole breadwinner, move out of the family home. Next, flatly refuse to pay any household bills or send any support until the court forces you to do it. Pursuing this method will, at some point, push your your wife into a financial corner. Desperation will then force her to agree to a settlement on your terms.
7. File Bogus Petitions: Trouble your wife by filing bogus petitions against her. You could even try to exclude her from the family home under your state’s protection from abuse laws.
8. Strike Fear In Her Heart: While it is true that mostly women get primary custody of the children, it is not a law etched in stone. Fathers too have won custody and take care of their children. Even if you don’t mind a joint custody or visitation agreement, go ahead and petition the court for primary custody of your children. This will ensure that she gets suitably frightened. Now you can use this fear to force your wife to reach an agreement – a financial one – on your terms.
9. Prolong the agony: Create issues where there are none and benefit from the ensuing conflict. You should avoid any kind of discussions with your wife including arrangements for her to have parenting time with your children. All this will ensure that the divorce is a prolonged affair and will finally wear your wife down. After all she’s not going to be too happy if she ends up losing all she has to her attorney before she gets her hands on any of your assets.
10. Delay Payment: In case you have no choice but to pay support money, there’s a method to make even this an agony for your wife. All you need to do is delay paying support money until the last possible day – even if you have the money to send. Before you do such a thing, do ensure that your spouse doesn’t have an income withholding order. Delaying support doesn’t become an offense in some states until it is 30 days past due. This means that your wife can only take legal recourse from day 31 and beyond. That gives you 29 days to get under her skin by delaying her support payment.
11. Be smart: The list above describes a few of the sneaky things you can do to guarantee that your wife doesn’t get away with daylight robbery. But before you adopt any of the above techniques, make sure that they are worth your while. If you have any children, acrimony between you and your wife could have a bearing on them. Also, the hard feelings and bitter aftertaste of your legal battles could hamper your chances of leading a normal life again.
Are you ready to face the consequences of this bitterness? If yes, then go ahead and use any of those methods. If not, be smart and negotiate a settlement that will be beneficial to both you and your wife.
Posted on February 2, 2015 | By Priya Jestin | Leave a response
Have you always dreamed of owning property in an exotic foreign land? It’s an exciting prospect. Of course, dreaming is easier than actually buying. Purchasing property in a foreign country is a major decision. Here are a few basic tips to help you buy property in a foreign country.
1. Do you have permission to purchase? Quite a few countries, such as Switzerland, restrict foreign ownership entirely. There may also be restrictions on the areas in which you are allowed to purchase property. You must verify that you meet all requirements before you decide to buy property in a particular country. Consult with the U.S. State Department about the stability and safety of the country you are considering.
2. Be prepared for a long haul. Buying property abroad is not something you can do in a day or even a few months. It requires tremendous research and you must be ready to spend at least a year on the process.
3. Research. It is important to carry out as much research as possible on your desired area. Visit property exhibitions, surf the internet and read about the region in books and magazines to get as much information as possible. Many people have unrealistic expectations about the kind of property they want to buy. Research will help you get a good idea of what you can afford and the kind of property available on the market.
4. Visit the country’s embassy/consulate. Officials at the embassy can advise you on a number of issues, including work permits and tax issues.
5. Make an informed choice. Try to read local newspapers and/or websites. This will help you get an idea of the culture in the country where you wish to buy property.
6. Get your finances in order. Even before you physically check out the property, you must get your finances in order. This will ensure that you don’t lose the property due to lack of resources. Compare mortgages in your country of choice as well as the United States.
7. Set a budget. It’s very easy to be tempted to spend more for a property you’ve fallen in love with. But remember, the asking price is just the basic cost of the property. You will have to spend at least 10 percent more for fees, stamp duty and other unexpected items. You must account for these additional costs when you set your budget.
8. Create an emergency fund. You may need to conduct repairs once you move in. Be prepared by setting some money aside beforehand.
9. Set up a bank account. Before you start looking at property to buy, set up a bank account in the country. It will save you time and hassle later.
10. Learn more about the planning permission rules in the country. They may require special permission to renovate the property or there may be restrictions on what you can do while living there.
11. Ask around. Ask relatives and friends to put the word out. Perhaps there is someone who has bought property in your desired area. People who have experience buying property there will be able to inform you about the pros and cons. Try to find these people through an investment property forum.
Beauty 12. Be practical. Don’t be blinded by the property’s beauty. Consider the proximity of the property to local amenities. A grueling trip may mean limited use. Also consider the modes of transportation available. Will you have to buy a car to live in the area? If you plan to rent it out, think about the needs of your tenants.
13. Visit as many sites as you can before you zero in on one property. Visiting various properties will give you insight into the market and help you find out what you really want before you commit.
14. Learn the laws of the foreign government with regard to real estate. This knowledge will help you in case of a dispute.
15. Rent a home in the region to get a feel for the area. You will get a much better idea of how transportation, shopping, and leisure activities are once you have lived there.
16. Research on the Internet to know more about the project and the developer. On the web, you can educate yourself about the developer’s reputation, which will help you make an informed decision.
17. If you are buying off-plan, make sure that insurance and indemnity clauses are included in case the firm goes bust. This will ensure that you don’t lose your hard-earned money.
18. Be meticulous. Judge the project by the promoters. If they don’t inspire confidence, find someone else, even if it seems to be a good price. There will be plenty of choices; don’t be hasty.
19. Ensure that the builder has all necessary licenses to build on the land.
20. If the property is still under development, you must analyze the development plans. Ask the developer for plans with exact dimensions and check them against your requirements. At this stage, you can also find out what is included, like kitchen appliances, air conditioning and more.
Real Estate Agents & Attorneys
21. Beware of fly-by-night, smooth-talking operators. Avoid property agencies that set up stalls at airports. Be extra cautious of ”friendly” people in bars that promise to deliver great property at unbelievably low rates.
22. Local versus foreign. Unscrupulous real estate agents may quote a much higher figure than the actual price of a property just because you are a foreigner. The best way to ensure you don’t get cheated is to approach several agents for quotes. This will give you a better idea of prevalent rates. Also, ensure that you contract business with reputable estate agents: they generally do not discriminate.
23. Conduct exhaustive research about available real estate agents. While it may not be possible to visit the country to perform in-depth research, you can call and search online for information. Whittle down to a short list of agents to contact.
24. Talk to the real estate agents you’ve short listed, but don’t give them carte blanche. Agents may have ulterior motives. For example, some developments offer high commissions; the agent may push you towards these over others.
25. Try to gauge the agents before you give them your business. A good agent will always encourage you to give a detailed explanation of your requirements so that they can help you select the right properties.
26. An good agent realizes the value of time. They will generally show you properties that meet your budget and requirements. These agents should not try to show you properties that don’t meet your specifications.
27. Agents usually keep detailed records of the properties they deal with. This information will help you know more about the quality and history of the building as well as any preexisting problems.
28. An established agent can ease the process of purchasing a property. They generally have good contacts with key people in local and state offices, which enables them to help you navigate the sometimes confusing bureaucratic rules. They will also be able to guide you through legalities and regulations of the country.
29. You need a good attorney to ensure that the legality of the purchase is correct. You can consult with your real estate agent for a recommendation. Also try the U.S. Embassy or Consulate for a list of lawyers. A good lawyer will help you get your real estate contract notarized, registered, and if necessary, translated. Your attorney will also be able to advise you on protection against unscrupulous land deals.
30. When choosing an attorney, architect, engineer, or builder, ensure that you choose those who are based and mainly work within the geographical area in which you plan to buy your property.
31. Factor your attorney’s fees into your purchase budget. Fees can vary according to the total value of a property. You can negotiate for a lower rate, but remember: you get what you pay for.
32. You may have an excellent lawyer, but don’t rely on them completely. It is essential to do your own research.
33. Ensure that all agreements between you and your architect, project manager, builder, or contracted supplier are in writing. If there are any changes to the original agreement, it should be noted and signed by all parties. This will help in case of conflict later on.
34. Get a survey done. If you cannot get a local surveyor, bring a surveyor or a builder from the United States. This may be an expensive proposition, but they will be able to point out things you may miss.
35. Find out if the property you are buying has clear title. This will ensure that the vendor can legally sell it.
36. Visit the area at different times of the year. If you plan to buy property in a holiday destination, understand that traffic can be seasonal. See what your property looks like during busy and slow seasons.
37. Check the neighborhood. If you are looking for some peace and quiet, ensure that your property is not next to a nightclub or directly under a flightpath.
Dog_238. Meet the neighbors. Make friends in the neighborhood. If your property will be unoccupied most of the year, ask them to help keep an eye on it.
Posted on January 24, 2015 | By Priya Jestin | Leave a response
For Sale by Owner: it’s an appealing way to sell. For a $200,000 home, you could save up to $14,000 in commission fees by doing it yourself! However, it’s not as easy as putting up a for sale sign and receiving a big check; you have to do the work that a real estate agent would have done for you. Here’s what you’ll have to take care of:
Asking price: Real estate agents will generally help you determine an asking price for your home. Without an agent, the responsibility for this important figure falls on you. You don’t want to set an unreasonably high or tragically low asking price. For about $200, you can hire an independent appraiser to determine your home’s market value. Before you set the asking price, take into account lawyer fees, advertising and other selling expenses. In a strong market with low interest rates, the asking price can be 10 to 15 percent above what the appraiser thinks it will go for. In a weak market, price at or below the appraisal. Decide ahead of time how much, if at all, you’re willing to negotiate the asking price to make a sale.
Advertising: Multiple Listing Services (MLS) are a great way to get exposure for your property. Unfortunately, to list with an MLS, you must be a licensed agent with membership in the MLS system. To get around this requirement, you can contact online services or brokers that will list your home for a flat fee. Another option is to list your home with services like BuyOwner that conduct a matching service between sellers and buyers.
Pre-qualifying buyers: Before showing your home, a real estate agent will pre-qualify buyers to make sure they’re worth the effort. To save yourself time and hassle, you should do the same. You don’t want to tie up the sale of your home waiting for a buyer to locate financing that’s out of their range. Find out if your prospective buyer has a mortgage lined up. If your buyer doesn’t have financing yet, find out their income and debt to determine the likelihood that they’ll be able to buy in your price range. Use a pre-qualification calculator to make sure you get it right.
Disclosures: Disclosures are known issues that may affect the price or sale of the home, like leaky pipes or a death on the property. Real estate agents are well versed in their state’s requirements for property disclosures. When selling your own home, it can be tricky to figure out the law regarding this information. To determine exactly what you have to disclose to buyers, contact your state’s real estate commission or hire a lawyer.
Negotiating: Traditionally, agents representing the seller and buyer work together to negotiate a sale price and contract. In a For Sale by Owner situation, you will have to do this negotiation on your own. You may find yourself up against a seasoned professional in the buyer’s agent or an unrepresented buyer that is difficult to work with. Whatever the case, you must brush up your skills in the art of negotiation. Understand the components of a sales contract, earnest money and and all special clauses that may get thrown your way. Consider hiring a real estate lawyer to look over your contract before you sign.
Posted on January 22, 2015 | By Priya Jestin | Leave a response
House flipping is a fun and exciting market that can be highly profitable. Many people leave a flip laughing all the way to the bank, while others are stuck with expensive flops. What can you do to keep your flip from turning into a flop? Don’t make these big money mistakes:
- Misuse government funding: If you’re using government funding, make sure your sale won’t get you in trouble with Uncle Sam. FHA federal assistance mortgages have restrictions on their use. For example, buyers cannot use FHA financing to buy property that is being sold within 90 days of purchase. FHA financing is also not available if you’re selling for double the original price within 180 days of the initial purchase.
- Leave your homework undone: Talk to the right people before you buy a house to get a clear estimate of the profit you can make from the flip. Loan officers, agents and contractors can give you a general idea of the costs you’ll incur when renovating. Know the area’s economy and real estate market to approximate the likelihood of a successful sale. Failure to get your facts straight upfront can leave you with a house that’s not worth the money you put into it.
- Long-distance buying: Never buy a house that you haven’t seen with your own eyes and never buy a house that’s too far away for frequent visits. Renovation is an expensive, hands-on venture; you don’t want contractors to take advantage of your absence. Your profit margin depends on effective management: make sure you can be there to oversee work.
- Overdo work: There’s no end to the amount of improvements that can go into a house. Be careful not to do redundant work. Can you clean fixtures instead of replacing them? A little elbow grease can save you lots of money. Remember to keep the home’s renovations within the standards of the neighborhood as well. Otherwise, you’ll have wasted work and money on a home that’s too expensive for the area.
- Get emotionally involved: Don’t buy overpriced property justP2 because you like the seller. You’re in the business to make a decent profit, not do social service. Keep a level head and make practical financial decisions.
- Buy too many too fast: New to the business? Don’t do too much at one time. The worst thing you can do is buy a large number of houses and take on multiple renovations at the same time. You’ll put too much money on the line. If you’re not able to sell the properties in a timely manner, you’ll get stuck with lots of bills to pay.
- Delay the sale: Don’t hold on to property that’s ready to sell. The longer you own the property, the more costs you incur. Utility bills, insurance premiums and property tax payments will eat into your profit. Sell the house as soon as you can to avoid having to deal with excessive maintenance costs.
- Hire an unscrupulous contractor: A good contractor is essential to your success as a house flipper. Don’t get stuck with someone who will waste your money and time. When shopping for a contractor, consider only those that are licensed. Take the time to check out references and ensure that you’re hiring someone that’s guaranteed to do a good job. If you hire the wrong person, you could end up with low quality work and an expensive, unfinished house on your hands.
- Lose track of the improvements you’ve made: Maintain proper records of the renovation work done to the home as well as the costs involved. Take these into account when calculating your asking price. Failing to do so can cause you to undersell the home, cheating you out of potential profit.
- Underestimate costs: Don’t get in over your head. Understand that you’ll need to put forward a significant amount of money before you can realize a profit. P3 Do a comparative market analysis and take into account all of the costs you’ll incur. This includes taxes, insurance, materials and labor, permits, brokerage fees, carrying costs, closing costs, debt repayments, and more. Overestimate so you’ll have a buffer in case of unexpected delays or extra costs.
- Start work without a plan: We’ve all heard horror stories about the contractor who doesn’t start work for a month, does shoddy work, and disappears. Nip this problem in the bud. Work out a contract that clearly defines your renovation budget and schedule. You’ll save yourself time, money and headaches.
- Waste money on useless courses: There are a host of self-help books, tapes and seminars that promise to teach you everything you need to know about house flipping. There are some legitimate educators out there, but many are just out to make a quick buck at your expense. Don’t spend money on advice that’s unhelpful and incorrect. If it sounds too good to be true, it probably is. Rely only on reputable publishers and read reviews before you fork over your cash.
Posted on January 21, 2015 | By Priya Jestin | Leave a response
Although there is money to be had, poor people seem to have trouble taking all that they can get. It’s very easy to remain poor if you don’t actively do something about it. So what is it that they are doing wrong? Here’s a list of ten mistakes that poor people make that serve to keep them poor forever:
1. Delay action: You probably have good intentions to save and get a budget together, but intentions can’t replace action. When is the right time to get your financial house in order? Right now. Delaying savings and investments can cheat you out of valuable interest earnings. Put this off too long, and you may find yourself penniless without a plan.
2. Using credit irresponsibly: Credit cards represent real money that eventually must be paid back. Maxing out your balance for a cute pair of shoes might seem like a good idea at the time, but you’ll likely end up paying more than they are worth in interest fees. Irresponsible credit use will also wreck your credit rating. If you have a poor rating, you’ll be subject to high interest rates when you want to buy a house or a new car. These high rates can translate into thousands of dollars over the life of a loan, cheating you out of money that would still be yours if you’d only used credit responsibly.
3. Frivolous spending: What’s more important, going out to eat this Friday night, or being able to buy diapers for your child? It seems like an easy answer, but many people have trouble prioritizing their needs versus wants. If you’re working with a limited budget, first buy the things you absolutely need, then create a savings fund to gather money for the things you really want: a your own home, nice vacation or college education.F
4. Living in a world of make believe: Don’t ignore money problems. Yes, they are real and no, they will not go away if you ignore them. Forgetting about credit card payments will only serve to make your debt higher. Get real about how much you owe and make a plan to pay it down.
5. Not being ambitious: A job at McDonalds may provide a steady paycheck, but if you’re out of school and still working the drive-thru, you’re simply not doing enough. Don’t be complacent; get out there and pound the pavement. A better job and more money is there to be found: you simply have to look for it and be willing to put forth the effort.
6. Lack of planning: College and retirement have two things in common: both require lots of money and can be foreseen well in advance. Why do some people end up scrambling when these events come
around? Because they failed to plan for them. After a child is born, you’ll have approximately 18 years to create a college fund, and retirement savings can start as soon as you receive your first paycheck! Plan ahead and save for major monetary events in your life to avoid wrecking your finances.
7. Believing that college is always good: Not everyone is made for college. Some don’t have the discipline and some just don’t need it. If your child has a tendency to blow off homework for partying, test the waters at a community college before spending big money on a four-year college. Does your child have interest and aptitude in a trade that doesn’t require school? Let them get straight to work. Education is expensive: you shouldn’t waste money or time on it if it will be of no benefit.
8. Living without health insurance: Insurance may seem like a luxury reserved for the wealthy, but you cannot afford to live without it. One accident or major illness can absolutely ruin your finances for many years to come. Even worse, avoiding the doctor because you lack insurance can allow a small problem to grow large, resulting in a catastrophic health and financial event.
9. Having children too soon: If you’ve just been married, you’ll have lots of people advising you to have kids while you’re still young. They’ll tell you that money problems will sort themselves out, but in reality, they may not. Children require numerous expenses that can derail your budget and savings before they even start. Get your finances in order, then start planning for a child.Pay
10. What savings? Most people who have trouble with their finances claim to be unable to save any money. They don’t have the discipline to set aside some money for inevitable emergencies. This means if they run into a problem, they may have to apply for high-interest payday loans. Loans of this sort can contribute to a downward spiral of deepening debt.
Posted on January 20, 2015 | By Victoria Hall | Leave a response
There are some people who claim that 1031 exchanges are a cure all to most of your real estate problems. What many gullible people don’t realize is that 1031 exchanges are not for everyone and are not appropriate in every situation:
One very important and simple requirement for a 1031 exchange is that it must be structured as a 1031 exchange before the transaction closes. This means you must assign a Qualified Intermediary into the transactions before you close the transaction.
Secondly, it is important to acquire replacement property that is equal to or greater in value than your relinquished property. You can buy property that is lower in value, only you’ll have to pay capital gains taxes on the amount that is not utilized. So in effect, you lose a load of money if you don’t invest correctly. In effect, this means you can always get more cash into the transaction, but cannot pull any cash out without creating potential taxable boot.
Another important requirement is that both the relinquished and the replacement properties must be held for rental, investment or use in your business. This means you cannot use 1031 exchange provisions for the sale of your primary residence.
There is quite a bit of confusion on the like kind property rule. Any type of real property is like kind to any other type of real property. You just have to ensure that you meet the requirements mentioned above.
The final most important rule is that you MUST stick by the time limits laid down for a 1031 exchange. This means you have 45 calendar days from the close of sale to identify potential replacement properties. You must complete the acquisition of some or all of the identified replacement property no later than 180 calendar days from the close of your sale transaction. Alternately you will need to complete the acquisition by the due date, including extensions, of your Federal income tax return.
Posted on January 18, 2015 | By Victoria Hall | Leave a response
While there is a great deal of interest in 1031 exchanges nowadays, knowledge on the topic is still scarce. Most people do have an idea about Section 1031 of the IRC that governs such exchanges. But apart from saving on capital gains taxes, 1031 exchanges can help you grow your portfolio, increase your income. The best part is that you can pass on your estate to your loved ones with not much of a tax liability. Here are a few of the areas where Section 1031 can make a huge difference:
Grow your real estate portfolio: Did you know that your investment property could attract huge capital gains taxes. For instance if your property’s value has increased about $200,000 in value, you’d have to pay tax of about $56,000.00 based on a tax rate of 28%. Now, if you use a section 1031 exchange, you will save the tax amount if you invest in a replacement property.
Turn Your Gain Into Tax Free Cash: Once you’ve completed a 1031 exchange sale-purchase, you can refinance your replacement property and take cash out as loan proceeds. This means you not only don’t have to pay capital gains but can also obtain access to equity by refinancing and taking cash out.
Plan your finances and estate: To benefit from a 1031 exchange in this instance, you must first have the real estate deeded into a family partnership or LLC (limited liability company). Now you will be able to continue taking management income from the property. And, your heirs receive the property without taxation and can continue to 1031 exchange the property and grow a real estate portfolio.
Posted on January 17, 2015 | By Victoria Hall | Leave a response
There are a few terms in 1031 exchanges that need to be explained in detail. Tenant in Common (TIC) is one such term. Simply put, TIC is a form of holding title to real property. It allows the owner to own an undivided fractional interest in the entire property. Also known as fractional ownership, TIC has become a popular choice among real estate investors seeking replacement property for their IRC Section 1031 tax deferred exchange.
This co-ownership structure allows you to own an undivided fractional interest in an entire property. You also get a share in your portion of the net income, tax shelters, and growth. Further, you will receive a separate deed and title insurance for your percentage interest in the property and have the same rights as a single owner. Allstates1031.com reports:
Because Tenants In Common opportunities are often “packaged” with management and financing in place, Tenants In Commons offer superior efficiencies in the identification, acquisition, financing, closing, and operating stages of real estate ownership. Fractional ownership also provides you with the ability to diversify your 1031 tax-free exchange into more than one property and to participate in potentially larger, institutional quality properties. Thus, small investors in one area of the country may participate in large industrial, commercial, and residential property investments all around the country with professional management.
Posted on January 16, 2015 | By Priya Jestin | Leave a response
A 1031 exchange is not as simple as it sounds – sell one property, buy another like kind one. Understanding the changing market dynamics, the Internal Revenue Service has accepted various kinds of exchanges that allow for greater flexibility to investors.
A reverse exchange is one such type. It involves acquiring a like kind replacement property before you dispose of your relinquished property. One of the main reasons why reverse exchanges are gaining popularity is the strict timeline. The real estate market is quite fast paced and you may sometimes lose the opportunity to acquire a desirable replacement property if you sell first. However, there are a few requirements to this kind of exchange. You must:
- Enter a written Qualified Exchange Accommodation Arrangement (QEAA), and
- Engage the services of an exchange accommodation titleholder (EAT).