Using a Tenants in Common (TIC) Structure for a 1031 Exchange
Section 1031 of the Internal Revenue Code allows commercial real estate investors to defer capital gains taxes on the profitable sale of an investment property as long as the proceeds are “exchanged” into another property that is “like kind.” In order to realize the benefits of the 1031 Exchange, the value of the replacement property […]
An Overview of 1031 Exchange Rules & Requirements
If a commercial real estate investor sells a property for a profit, he or she is required to pay capital gains taxes on the amount of the profit. And if the profit (or gain) is large enough, the income tax bill can be significant. Fortunately, there is a way that savvy property owners can defer […]
What are the Tax Benefits of a Commercial Real Estate Investment?
The major benefits of a commercial real estate investment—such as rental income, price appreciation, and portfolio diversification—are widely known to be primary drivers of investment activity. But, these aren’t the only benefits that should be considered. Even if the income and appreciation for a property are relatively limited, there are a number of significant tax […]
Tax Treatment of Real Estate Income
The basic premise behind a rental real estate investment is relatively simple: an investor purchases a property, leases it to an individual or business, and uses the rental income to pay the expenses needed to operate the property. If there is any money left after all expenses are paid (including debt service), it is returned […]
Tax Treatment of Commercial Real Estate Income
One of the major benefits of a commercial real estate (CRE) investment is the tax treatment of the income produced by it. But for those not accustomed to the terms and accounting concepts used to describe the tax implications of CRE, the exact mechanics of these benefits can be confusing. To understand how it all […]
What Are The Tax Benefits of Commercial Real Estate Investment?
When discussing the benefits of commercial real estate investing, many are quick to cite the cash flow generated by rental property leases or the capital appreciation driven by the supply and demand characteristics of a given market or improving Net Operating Income. While these are important benefits and material components of the total return, they […]
The 1031 Exchange Napkin Test
The profitable sale of an investment property presents a good news/bad news situation for many investors. The good news is that the property was sold for more than the purchase price, which means that the transaction was profitable. But, that same profit (or “gain”) can be accompanied by a big income tax bill on their […]