Steven Monk's (smonk) Blog

Residential Real Estate If you depreciated residential pre-1987 realty using just straight line depreciation, the tax results if you sell it will be the same as for a sale of post-1986 property, as described above. But if (as was possible) you, at any time, used a declining balance method to depr...

Section 1250 Property (Depreciable Real Property) Generally, real estate investment property, as defined under Section 1250 of the Internal Revenue Code, must be depreciated for income tax purposes.  The depreciation method used depends on a number of factors including when the investment propert...

Income Tax RatesYou are probably already familiar with the current Federal capital gain income tax rates, which vary based on your income tax bracket, for properties held more than 12 months.  In most cases, you will find yourself subject to the maximum Federal capital gain income tax rate of 15%...

Choosing a SAFE 1031 Exchange Qualified Intermediary (QI)The 1031 Exchange Qualified Intermediary (often referred to in the real estate industry as an 1031 Exchange Accommodator or 1031 Exchange Facilitator) is a crucial part of any successful 1031 Exchange transaction.  You should therefore exer...

1031 Exchange Deadlines45 calendar days to identify potential like-kind replacement property.180 calendar days to complete the 1031 exchange.  1031 Exchange Identification Rules 3 Property Rule  Investors may identify up to three (3) potential like-kind replacement properties, without regard to t...

1031 Exchange Qualifications   Qualified Intermediary  You must select your Qualified Intermediary ("QI") and have your QI assigned into your relinquished property (sale) transaction before the transaction closes in order to preserve the tax-deferred benefits of the 1031 exchange.  Qualified Use ...

1031 Exchanges Can Be Combined with 121 Exclusion Revenue Procedure 2005-14 was issued and made effective on January 27, 2005 and made it possible for the first time for homeowners to use the tax-deferral mechanism of Section 1031 on their primary residence, if done in conjunction with the specif...

Parking Arrangement Guidelines Issued for Reverse 1031 Exchange Structures The issuance of Revenue Procedure 2000-37 gave Investors and Qualified Intermediaries guidelines on how to structure reverse tax-deferred like-kind exchange transactions where the Investor's like-kind replacement property ...

Domestic vs. Non-Domestic and Related Party Issues Addressed The Revenue Reconciliation Act of 1989 resulted in a few changes to the tax-deferred like-kind exchange arena, including the disqualification of tax-deferred like-kind exchange transactions between domestic (United States) and non-domes...

Growth Factor Introduced In addition, the concept of a "growth factor" was introduced.  The Starker family's tax-deferred like-kind exchange transactions were structured so that Crown Zellerback would compensate the Starker family with a "growth factor."  This growth factor was essentially design...