Introduction: Gary Gorman and Donna Fries on the Real Estate 101 Radio Show. - New things that have happened in the 1031 industry. - Some new tax laws: Big court case. - The new 1031 book: Exchanging Up!, available on Amazon.com. - The 1031 Experts is built on referrals.
New law changes in 2004. - The change in §121 and how it affects §1031. - How to take gain tax-free. - The effect: the change in the holding period to get that gain. - If you sell an investment property and buy a property that becomes your home. - Is this strictly if it's a 1031 exchange going into the property? - Does this only affect people who are rolling into their home from some other investment property? - The good part: this clears up a former controversy and makes it crystal clear.
Is this a GOOD law change? - The 2-year extension period. - What's the only difference? - What does the law say? - Rental rules and time periods. - Let's say the first year has gone by and the vacation home [see: 1031 vacation home update: May 2007] has been rented a few times, now we have 4 years left before we can sell it for the gain tax-free: after that first year period, do they have to live in it on a contiguous basis? Or can they live in it for a year, rent it out for a year, etc.? - How does that play out, or do we know? - Utilizing the property at its highest and best use and get the highest and best use income out of it.
A question about refinancing a rental property: "would I be better off using the rental property for a refinance as collateral vs. using my primary home?" - Owner-occupied interest. - Refinancing rates. - The importance of keeping your personal residence debt free. - Can you write-off the interest of your investment like you can your primary residence?
Other changes in the law: Tax Court case involving a vacation home - The big controversy in 1031 law: whether or not a pure vacation home qualifies for a 1031 exchange when you sell it? - Can they do a 1031 exchange if they never rent it out and roll it into a bigger condo? - The IRS issued a ruling that vacation homes are exchangeable provided that you can prove SOME investment intent: but what is the definition of SOME? - Secondly, how do you prove it? - What if their intent is to use it personally? - What if their intent is to use it as vacation property? - Until now this was a questionable situation; the recent tax court ruling opened up a huge door.
"I'm selling condominiums and building single-family housing: can I turn the condominium profit and 1031 those into the new project?" - What is she going to do with those homes when they're built? - Are these spec homes? - What if she keeps a couple of the houses as rental property? - The "Build-to-Suit" technique. - The problems with that: Does the IRS think this is this good law or bad law? - Are the steps/hoops you have to jump through worth the cost of a Build-to-Suit type transaction? - The book Exchanging Up! Has a whole chapter on Build-to-Suit transactions. - Doing 1031s, you have to have a different thought process than just thinking about buying and selling investments: it goes in far deeper.
Gary Gorman's 1031 seminar, March 2005 in Florida: information at www.donnafries.com. - If you're considering a 1031 investment, you've got to call a 1031 expert BEFORE you sign that dotted line. - Can you avoid a costly situation by calling a 1031 expert first before you buy that property? - About Gary Gorman, professional experience. - About The 1031 Exchange Experts, their staff. - The Expert's involvement with the IRS.
What the public doesn't know about tax court cases. - What about the cases where the case never gets published? - Is it worth doing a 1031 exchange on several small rental houses with a profit of $20-25K? - If I bought a house that has some excess land that I can build some other rental houses on, would it be wiser to sell that to another corporation that I own? When I sell a few houses and then buy it from myself in another corporate name? Can I do that? - The IRS's "related party rules." - Gary's new book Exchanging Up!.
...the most informative radio program on real estate investing I have ever heard!
Donna Fries' radio interview with Gary Gorman (12-04-04) was the most informative radio program on real estate investing I have ever heard. I invest in a lot of beach resorts here, and I heard a lot of positive comments from others on the 1031 interview. I cant wait to get Gary's book!
Gus Pyroulis
Real Estate Investor
Panama City, Florida
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