Tag: Tax Planning
Tax Mitigation Playbook: What Is Depreciation and Why Is It Important to a 1031 Exchange?
Depreciation is a major part of the appeal of real estate ownership. Taking the “wear and tear” of a property as a loss against the rental gains makes a huge impact on the personal tax strategy. But the effect of
Tax Mitigation Playbook: 1031 Replacement Rules to Know
The 3-Property Rule The 3-property rule states that the replacement property identification during the initial 45 days of the exchange can be made for up to three properties regardless of their total value. After relinquishing their initial property, the taxpayer
Tax Mitigation Playbook: What is “Boot” in a 1031 Exchange?
The term boot is commonly used when discussing the tax consequences of an exchange. However, the term “boot” is not used in the Internal Revenue Code or the Regulations. Which is a source of confusion. The “Boot” received is the
Tax Mitigation Playbook: What is a 1031 Exchange?
1031 exchange is one of the most popular tax strategies available when selling and buying real estate “held for productive use in a trade or business or investment”. It allows the owner of a property to exchange one asset for another. Our
Tax Mitigation Playbook: Who can use 1031 Exchanges?
Section 1031 of the tax code allows property owners to defer taxes on the sale of their real estate held for business or investment purposes. At InSight, we use this for several strategic and preference-based reasons for clients (See What
Tax Mitigation Playbook: 1031 Replacement Property Rules
Like-kind property is defined according to its nature or characteristics, not its quality or grade. This means that there is a broad range of exchangeable real properties. Vacant land can be exchanged for a commercial building, for example, or industrial
Tax Mitigation Playbook: is this a property “exchange”?
A sale followed by a purchase does not qualify as a 1031 Exchange. Rather a process of intention needs to be in place to qualify for an exchange to count for the tax benefits. The transaction must be treated as
Tax Mitigation Playbook: 1031 Exchange Pitfalls to Avoid
Excess Funds The identification period of a 1031 exchange refers to the first 45-days when a taxpayer identifies property they would like to acquire as a replacement to their relinquished property. It is common for a taxpayer to identify more
