Home Real Estate Investing

Real Estate Investing

How the Tax Code Rewrite Favors Real Estate Over Art

Real estate investors were given a gift after Congress voted to maintain what are known as 1031 exchanges, a section in the tax code that allows for property to be sold tax-free as long as the proceeds are used to buy more property. Investors whose real estate holdings are comparatively modest — and their heirs — were given an added bonus: The estate tax exemption for couples doubled to $22.4 million, allowing those investors to conceivably pay no tax on their properties, ever. If the investor who bought real estate in San Francisco sold the property, the money could be used to buy another property in San Francisco — or anywhere in the country — without the seller’s paying a tax on the appreciated gains in the original property. Combine those tax-free gains with the higher estate tax exemption, and it is possible that a real estate investor would never have to pay capital gains or estate tax on tens of millions of dollars in real estate. Mr. Scheriff, who completed about 400 exchanges for his clients last year, gave this example: A person sells a building in New York for $1 million and uses 1031 exchanges to buy two rental houses on a golf course in Florida. In the last major tax overhaul, which occurred in 1986, a provision in the code allowed for a delay of 180 days between selling one property and buying another, without any tax on the gains from the sale of the first property. also allows people to do “reverse exchanges” — buying a property first and then picking other properties of equal value to sell without paying tax. To avoid paying tax, the client used the proceeds to buy the land on which a McDonald’s sits. Top collectors, who may spend millions of dollars for a single work of art, have taken advantage of 1031 exchanges that allowed them to use sales from their collection to buy new art — and save the nearly 30 percent tax on the gains. “I think many collectors, with or without the tax benefit, are going to buy and sell art,” he said.

Buying a rental property is cheaper in the winter — here are the 26...

Cleveland Increase in annual investment return: 12.25% Median home sale price (winter): $69,950 Median home sale price (summer): $77,500 Savings on home purchase: 10% 22. Dallas Increase in annual investment return: 12.37% Median home sale price (winter): $166,950 Median home sale price (summer): $201,875 Savings on home purchase: 17% 21. Detroit Increase in annual investment return: 12.47% Median home sale price (winter): $132,000 Median home sale price (summer): $165,000 Savings on home purchase: 20% 20. St. Louis Increase in annual investment return: 12.82% Median home sale price (winter): $91,125 Median home sale price (summer): $110,000 Savings on home purchase: 17% 17. New York City Increase in annual investment return: 14.88% Median home sale price (winter): $309,000 Median home sale price (summer): $405,733 Savings on home purchase: 24% 11. Minneapolis Increase in annual investment return: 16.08% Median home sale price (winter): $163,823 Median home sale price (summer): $205,000 Savings on home purchase: 20% 10. Seattle Increase in annual investment return: 17.81% Median home sale price (winter): $389,500 Median home sale price (summer): $517,000 Savings on home purchase: 25% 8. Columbus Increase in annual investment return: 18.61% Median home sale price (winter): $131,000 Median home sale price (summer): $175,000 Savings on home purchase: 25% 6. Chicago Increase in annual investment return: 21.19% Median home sale price (winter): $185,000 Median home sale price (summer): $250,000 Savings on home purchase: 26% 4. Cincinnati Increase in annual investment return: 23.76% Median home sale price (winter): $85,500 Median home sale price (summer): $110,203 Savings on home purchase: 22% 2.

What the Heck is Mortgage “Note” Investing? The Start of a Journey

Have you ever heard of people talking about note investing? Probably not! It is not a topic that you are discussing over coffee or at a social event.  Would you be...

TRENDING

How Finding Your “Why” Will Jumpstart Your Real Estate Career

From the friends and colleagues I’ve made and the real estate deals I’ve completed to buying our dream house on 11 acres and my wife being able to stay home with our kids, as well as future plans for philanthropic causes, my life would be totally different if it wasn’t for real estate. The other nice thing about having the diversity in your business is that when you see an opportunity, you understand it, can decide if it’s a good opportunity for you or not, and take action. Related: Opinion: Quitting Your Job & Living on Passive Income ISN’T Necessary for Financial Success Money Is Less Important Than Opportunity and Lifestyle Money is easy to make, an it’s even easier when the target is clear. As a family, we talk about spending, saving, and investing. We want our kids to understand where the money comes from and what good financial decisions look like. Focusing on Time One of the massive ways real estate helps with time is in its ability to create and make passive income. If you are trying to figure out why you can’t get out of your day job that makes $100k a year but leave you with no free time, you need to think back to the legs of the stool that make up your income. Related: Which Real Estate Investments Provide True Passive Income & Financial Freedom? Instead, start thinking of ways to create passive income. What’s driving you to create income through real estate?

Have You Ever Felt Lost?