Too Soon to Talk Taxes? Let’s Talk About Giving Then!
The end of the year is almost here. Most people are making holiday plans. Looking forward to festive feasts, family gatherings and fun seasonal entertainment. Here at Realty Management Associates we are focusing on closing out the books for the year. Not a job one usually cares to equate with the joy and happiness of the holiday season!
BUT before we talk about bookkeeping and taxes, let’s focus on Gratitude. Most of our tenants are great tenants. Wouldn’t it be nice to show them some appreciation for being good stewards of your investment property? A $25 Visa Gift Card would go a long way to putting a smile on your tenants’ faces and good will for the New Year. Better yet, it’s tax deductible to you! Now that’s a win/win! If you would like to gift your tenant(s) a twenty five dollar Visa card, please let us know by emailing: Claire@rentalsinboise.com. Be sure to include your property address and your name. We will take care of the rest!
OK, now back to the mundane. Maintaining good records for our clients is an important part of our management services. These records not only provide detailed income and expenses provided in tax ready reports to pass along to your accountant, but they may also help you to evaluate the viability of your rental(s) to assist you on your path to wealth creation.
Look for your year-end Statement and 1099 available through your online Owner Portal in January. A copy will also be mailed directly to you.
The 1031 Exchange……. Like Mining for Gold in the Tax Code
Despite popular belief, the Internal Revenue Tax Code is actually littered with little golden nuggets of tax relief. Who knew? Some of these nuggets are well known and easy to navigate like the tax deduction for interest paid on your home mortgage. Then there's Section 1031 of the Internal Revenue Code. Oh sure, the benefits of a "1031 tax deferred exchange" are well known, but this element of the tax code is certainly not easy to navigate. But here's the good news. Just knowing this gold nugget of tax relief even exists is half the battle!
Simply defined, the 1031 Exchange is a mechanism to defer Capital Gains Tax from the financial gain from the sale of property. So, let's first consider that having a financial gain from the sale of property is a good thing. And knowing that taxes on that financial gain can be deferred makes a good thing even better. Like adding bacon to your favorite burger!
Another very basic element of the 1031 Exchange is that it may not be for you, so it's best to evaluate your unique circumstances. Because, besides a financial gain, there are several other elements needed before participating in a successful 1031 Exchange. They include: your accountant, a third-party accommodator, an informed real estate agent, a settlement agent, and an experienced lender, just to name a few.
Putting together an A-team to manage your 1031 Exchange is the key. Then, once a decision is made to pursue the tax deferral, later comes the process of identifying "like-kind" property (within 45 days of the sale of the relinquished asset) and closing on the property (within 180 days of sale). Like-kind refers to any real property held for investment so there are many options available. In fact, capital gains can even be avoided completely... So the gold is there!
If you are in those early stage evaluations and need a bit of guidance, please allow the Swope team to help you mine for the "1031, tax-deferred" gold in the Tax Code!
Eric is an Agent with Swope Investment Properties, specializing in multifamily units in the greater Boise market: http://www.swopeinvestmentproperties.com/site/OurAgents/Eric/tabid/122/Default.aspx
- 2015 is the 19th year that The Idaho Botanical Garden is showcasing Winter Garden aGlow.
- 300,000 lights illuminate the slumbering garden creating a magnificently festive vision against the dark winter sky.
- 50,000+ people visited the Winter Garden aGlow during the 2014 Holiday season.
To learn more, visit: http://idahobotanicalgarden.org/winter-garden-aglow/