Sun, Nov 08, 2009
|
1031 Exchanges vs. Equity Holding Trusts(tm)
| | Monday, August 05, 2002 @ 05:00 AM EDT
|  Printer Friendly Page
 Send this Story to a Friend |
Contributed by: Derrick Ali
Derrick Ali Properties
Read more archived articles about Squeezing More Profit
You may have heard of people "exchanging" their investment property to avoid huge tax bites out of their sale proceeds. An exchange of real property can be a valuable tool to defer or avoid capital gains tax on real estate transactions. And the same benefits can be obtained using a PACTrust™ or Equity Holding Trust™!
While Section 1031 of the IRS Code
offers real estate investors a great investment opportunity to build wealth and save taxes. The PacTrust/EHTrust™ can offer More Flexibility to you as a seller/owner/buyer/investor.
By completing a 1031 exchange, you can dispose of investment property, use all of the equity to acquire replacement investment property, defer the capital gains tax that would ordinarily be paid, and leverage all of you equity into a replacement property.
The same is true in a PacTrust/EHTrust™ in addition you (as a beneficiary) can assign your Beneficial interest in the property, resell your interest, sell the Tax credits, and/or lease the property with Tax Write Offs, credits towards future purchase and/or equity appreciation participation in return for receiving Higher-Rent payments.
Replacement property acquired in an exchange must be of "like-kind" or similar to the property being sold. In a PacTrust/EHTrust™ there are no replacement conditions you pay no taxes until the Trust terminates and the property is refinanced by your Resident Beneficiary (tenant buyer).
The following are examples of properties that could be eligible for a 1031 exchange:
* Single Family Rental
* multi-family Rentals
* Farms/Ranches
* Raw Land
* Retail Offices
* Motels/Hotels
* Golf Course
* Industrial
* Leases of 30 years or more
Properties NOT eligible under 1031 include foreign property and primary residences.
1031 exchanges are primarily designed for people interested in investment properties, not for typical home sellers and buyers looking to purchase a residence. PacTrust/EHTrust™ are for Investors, Sellers, Buyers, Renters, and whomever else has a real estate need!
Note: Derrick Ali is Director and Chairman of Consumer Mortgage Loan Advocates. He is the author of The Quick Start Real Estate Investing Guide. Derrick specializes in Land Trust Transaction Engineering for Equity Holding Trusts(tm) and/or PACTrusts (tm)
methods. You can also hire him to consult you on the set up of these Land Trusts for you.
Word Cloud:
defer 1031 avoid exchange equity replacement pactrust/ehtrust™ exchanges same investment />
the purchase property, more trusts(tm) eligible holding property real people and/or capital gains estate
|
|
| |
Average Score: 3
Votes: 3
|
|
|
|
|
Logged In members can moderate all comments.
|
|
