Development

Category: 1031 Exchange General

  • Preserve Your Agricultural Assets with 1031 Exchange

    Preserve Your Agricultural Assets with 1031 Exchange

    Like-kind exchanges provide benefits to sellers of agricultural property under 1031 like-kind exchange. The fact is you can buy any real property such as farm, ranch, apartment complex, commercial building, or rental home used for trade, investment, or businesses purposes. These rules allow agricultural property owners to diversify their investments and grow a wider range of assets. Without 1031 tax deferred exchange, agricultural property owners will be held responsible for paying taxes on the property being sold, even if they reinvest and purchase new property.
    What can Agricultural Property Owners Exchange with 1031?
    Agricultural property owners can exchange labor, chemical, and water intensive land into less management intensive property such as residential or office condominiums. Or they can exchange conservation easements on their ranch land to acquire new property.
    For example:
    Recently a client sold two easements on his agricultural land. One of the easements restricted his ability to use the wells on his land. This helps keep water in the underground aquifers and permits more water to flow further downstream for other users. The second easement restricted his ability to use chemical fertilizers on his land. The societal benefit here is that fewer chemicals being applied to the land mean fewer chemicals running into the streams, polluted the water, and killing the fish. The cash generated by the sale of the easements was used to acquire a few single-family homes nearby, which will be used as VRBO/Airbnb type rentals.
     
    Time is of the essence when it comes to Selling and Obtaining Real Property
    Timing is crucial when it comes to selling and acquiring real property in a Section 1031 gives the seller 180-days to replace their property when exchanging into another real property.
    Why am I doing a 1031 tax deferred exchange?

    Diversify your portfolio

    Rather than having all of your funds locked into one large property, you can reinvest into multiple properties of different asset classes (residential, commercial, retail, etc.).
    Rather than having all of your funds locked into one location, you can reinvest across town, or across the country, to take advantage of stronger opportunities.
    Spread assets into smaller investments as party of an estate plan.

    Upgrade or consolidate your portfolio

    Rather than having your investments scattered across the county, consolidate into fewer, larger properties.

    For more information, https://www.accruit.com/contact-us”>contact Accruit and subscribe to our https://www.accruit.com/blog/”>blog

  • Preserve Your Agricultural Assets with 1031 Exchange

    Preserve Your Agricultural Assets with 1031 Exchange

    Like-kind exchanges provide benefits to sellers of agricultural property under 1031 like-kind exchange. The fact is you can buy any real property such as farm, ranch, apartment complex, commercial building, or rental home used for trade, investment, or businesses purposes. These rules allow agricultural property owners to diversify their investments and grow a wider range of assets. Without 1031 tax deferred exchange, agricultural property owners will be held responsible for paying taxes on the property being sold, even if they reinvest and purchase new property.
    What can Agricultural Property Owners Exchange with 1031?
    Agricultural property owners can exchange labor, chemical, and water intensive land into less management intensive property such as residential or office condominiums. Or they can exchange conservation easements on their ranch land to acquire new property.
    For example:
    Recently a client sold two easements on his agricultural land. One of the easements restricted his ability to use the wells on his land. This helps keep water in the underground aquifers and permits more water to flow further downstream for other users. The second easement restricted his ability to use chemical fertilizers on his land. The societal benefit here is that fewer chemicals being applied to the land mean fewer chemicals running into the streams, polluted the water, and killing the fish. The cash generated by the sale of the easements was used to acquire a few single-family homes nearby, which will be used as VRBO/Airbnb type rentals.
     
    Time is of the essence when it comes to Selling and Obtaining Real Property
    Timing is crucial when it comes to selling and acquiring real property in a Section 1031 gives the seller 180-days to replace their property when exchanging into another real property.
    Why am I doing a 1031 tax deferred exchange?

    Diversify your portfolio

    Rather than having all of your funds locked into one large property, you can reinvest into multiple properties of different asset classes (residential, commercial, retail, etc.).
    Rather than having all of your funds locked into one location, you can reinvest across town, or across the country, to take advantage of stronger opportunities.
    Spread assets into smaller investments as party of an estate plan.

    Upgrade or consolidate your portfolio

    Rather than having your investments scattered across the county, consolidate into fewer, larger properties.

    For more information, https://www.accruit.com/contact-us”>contact Accruit and subscribe to our https://www.accruit.com/blog/”>blog

  • Preserve Your Agricultural Assets with 1031 Exchange

    Preserve Your Agricultural Assets with 1031 Exchange

    Like-kind exchanges provide benefits to sellers of agricultural property under 1031 like-kind exchange. The fact is you can buy any real property such as farm, ranch, apartment complex, commercial building, or rental home used for trade, investment, or businesses purposes. These rules allow agricultural property owners to diversify their investments and grow a wider range of assets. Without 1031 tax deferred exchange, agricultural property owners will be held responsible for paying taxes on the property being sold, even if they reinvest and purchase new property.
    What can Agricultural Property Owners Exchange with 1031?
    Agricultural property owners can exchange labor, chemical, and water intensive land into less management intensive property such as residential or office condominiums. Or they can exchange conservation easements on their ranch land to acquire new property.
    For example:
    Recently a client sold two easements on his agricultural land. One of the easements restricted his ability to use the wells on his land. This helps keep water in the underground aquifers and permits more water to flow further downstream for other users. The second easement restricted his ability to use chemical fertilizers on his land. The societal benefit here is that fewer chemicals being applied to the land mean fewer chemicals running into the streams, polluted the water, and killing the fish. The cash generated by the sale of the easements was used to acquire a few single-family homes nearby, which will be used as VRBO/Airbnb type rentals.
     
    Time is of the essence when it comes to Selling and Obtaining Real Property
    Timing is crucial when it comes to selling and acquiring real property in a Section 1031 gives the seller 180-days to replace their property when exchanging into another real property.
    Why am I doing a 1031 tax deferred exchange?

    Diversify your portfolio

    Rather than having all of your funds locked into one large property, you can reinvest into multiple properties of different asset classes (residential, commercial, retail, etc.).
    Rather than having all of your funds locked into one location, you can reinvest across town, or across the country, to take advantage of stronger opportunities.
    Spread assets into smaller investments as party of an estate plan.

    Upgrade or consolidate your portfolio

    Rather than having your investments scattered across the county, consolidate into fewer, larger properties.

    For more information, https://www.accruit.com/contact-us”>contact Accruit and subscribe to our https://www.accruit.com/blog/”>blog

  • What are my 1031 Exchange Depreciation Options?

    Having been in the tax code for over 100 years, real estate investors have come to appreciate the value of a 1031 exchange to defer taxes on gains and depreciation recapture.  Savvy investors have come to imbed this tax strategy into their process to lower the cost of capital and reliance on bank lending. Thus, increasing their returns.  The benefits also creep through to the overall economy through the multiplier effect on other industries involved in real estate transactions and subsequent property improvements.   

  • What are my 1031 Exchange Depreciation Options?

    Having been in the tax code for over 100 years, real estate investors have come to appreciate the value of a 1031 exchange to defer taxes on gains and depreciation recapture.  Savvy investors have come to imbed this tax strategy into their process to lower the cost of capital and reliance on bank lending. Thus, increasing their returns.  The benefits also creep through to the overall economy through the multiplier effect on other industries involved in real estate transactions and subsequent property improvements.   

  • What are my 1031 Exchange Depreciation Options?

    Having been in the tax code for over 100 years, real estate investors have come to appreciate the value of a 1031 exchange to defer taxes on gains and depreciation recapture.  Savvy investors have come to imbed this tax strategy into their process to lower the cost of capital and reliance on bank lending. Thus, increasing their returns.  The benefits also creep through to the overall economy through the multiplier effect on other industries involved in real estate transactions and subsequent property improvements.   

  • What are Special Member, Independent Manager and Springing Member Services?

    Special Member or Independent Manager services provide bankruptcy remoteness to lenders, isolating them from any potential insolvency or bankruptcy risks in commercial real estate financing transactions.  When making real estate loans, lenders have a first mortgage on the property so that, in the event of a borrower default, the lender does not risk losing its security interest or position. However, just being subject to the bankruptcy proceedings can impede the lender’s efforts to take the property back. For this reason, the lender’s loan commitment letter typically will require the use of a new special purpose entity (SPE) LLC created by the borrower to hold title to the property. In order to prevent this type of SPE LLC from bankruptcy, a separate party, a “Special Member,” is inserted into the LLC’s operating agreement, whose accordance is required in filing bankruptcy. The operating agreement further stipulates that the special member agrees in advance not to allow the property to go bankrupt. This practice first appeared in the commercial mortgage-backed securities (CMBS) market about twenty years ago, and it was found that the loans that had adopted this bankruptcy remote feature were rated more favorably by ratings agencies like Standard & Poor’s (S&P). Conventional institutional lenders, such as large insurance companies and pension funds, quickly determined that their loans would also be best served if they also had a bankruptcy remote nature.
     
    At times, the lender will require a Springing Member.  Unlike the Special Member or Independent Manager, the role of the Springing Member only arises when there is only a single member remaining in the LLC and that member ceases to remain a member for reasons such as that person’s death.  The Springing member “springs into action” and becomes a Special Member to avoid the LLC’s dissolution otherwise due to the fact that the last member ceased to be a member.

    Although these entities receive compensation on an annual basis for acting or remaining ready to act in their particular capacity, they have no interest in the profits or losses of the LLC and are not otherwise treated as a regular member.
    To learn more about special member, independent manager, and springing member services, contact Accruit by emailing info@accruit.com or calling (800) 237-1031 today!

  • What are Special Member, Independent Manager and Springing Member Services?

    Special Member or Independent Manager services provide bankruptcy remoteness to lenders, isolating them from any potential insolvency or bankruptcy risks in commercial real estate financing transactions.  When making real estate loans, lenders have a first mortgage on the property so that, in the event of a borrower default, the lender does not risk losing its security interest or position. However, just being subject to the bankruptcy proceedings can impede the lender’s efforts to take the property back. For this reason, the lender’s loan commitment letter typically will require the use of a new special purpose entity (SPE) LLC created by the borrower to hold title to the property. In order to prevent this type of SPE LLC from bankruptcy, a separate party, a “Special Member,” is inserted into the LLC’s operating agreement, whose accordance is required in filing bankruptcy. The operating agreement further stipulates that the special member agrees in advance not to allow the property to go bankrupt. This practice first appeared in the commercial mortgage-backed securities (CMBS) market about twenty years ago, and it was found that the loans that had adopted this bankruptcy remote feature were rated more favorably by ratings agencies like Standard & Poor’s (S&P). Conventional institutional lenders, such as large insurance companies and pension funds, quickly determined that their loans would also be best served if they also had a bankruptcy remote nature.
     
    At times, the lender will require a Springing Member.  Unlike the Special Member or Independent Manager, the role of the Springing Member only arises when there is only a single member remaining in the LLC and that member ceases to remain a member for reasons such as that person’s death.  The Springing member “springs into action” and becomes a Special Member to avoid the LLC’s dissolution otherwise due to the fact that the last member ceased to be a member.

    Although these entities receive compensation on an annual basis for acting or remaining ready to act in their particular capacity, they have no interest in the profits or losses of the LLC and are not otherwise treated as a regular member.
    To learn more about special member, independent manager, and springing member services, contact Accruit by emailing info@accruit.com or calling (800) 237-1031 today!

  • What are Special Member, Independent Manager and Springing Member Services?

    Special Member or Independent Manager services provide bankruptcy remoteness to lenders, isolating them from any potential insolvency or bankruptcy risks in commercial real estate financing transactions.  When making real estate loans, lenders have a first mortgage on the property so that, in the event of a borrower default, the lender does not risk losing its security interest or position. However, just being subject to the bankruptcy proceedings can impede the lender’s efforts to take the property back. For this reason, the lender’s loan commitment letter typically will require the use of a new special purpose entity (SPE) LLC created by the borrower to hold title to the property. In order to prevent this type of SPE LLC from bankruptcy, a separate party, a “Special Member,” is inserted into the LLC’s operating agreement, whose accordance is required in filing bankruptcy. The operating agreement further stipulates that the special member agrees in advance not to allow the property to go bankrupt. This practice first appeared in the commercial mortgage-backed securities (CMBS) market about twenty years ago, and it was found that the loans that had adopted this bankruptcy remote feature were rated more favorably by ratings agencies like Standard & Poor’s (S&P). Conventional institutional lenders, such as large insurance companies and pension funds, quickly determined that their loans would also be best served if they also had a bankruptcy remote nature.
     
    At times, the lender will require a Springing Member.  Unlike the Special Member or Independent Manager, the role of the Springing Member only arises when there is only a single member remaining in the LLC and that member ceases to remain a member for reasons such as that person’s death.  The Springing member “springs into action” and becomes a Special Member to avoid the LLC’s dissolution otherwise due to the fact that the last member ceased to be a member.

    Although these entities receive compensation on an annual basis for acting or remaining ready to act in their particular capacity, they have no interest in the profits or losses of the LLC and are not otherwise treated as a regular member.
    To learn more about special member, independent manager, and springing member services, contact Accruit by emailing info@accruit.com or calling (800) 237-1031 today!

  • What are Special Member, Independent Manager and Springing Member Services?

    Special Member or Independent Manager services provide bankruptcy remoteness to lenders, isolating them from any potential insolvency or bankruptcy risks in commercial real estate financing transactions.  When making real estate loans, lenders have a first mortgage on the property so that, in the event of a borrower default, the lender does not risk losing its security interest or position. However, just being subject to the bankruptcy proceedings can impede the lender’s efforts to take the property back. For this reason, the lender’s loan commitment letter typically will require the use of a new special purpose entity (SPE) LLC created by the borrower to hold title to the property. In order to prevent this type of SPE LLC from bankruptcy, a separate party, a “Special Member,” is inserted into the LLC’s operating agreement, whose accordance is required in filing bankruptcy. The operating agreement further stipulates that the special member agrees in advance not to allow the property to go bankrupt. This practice first appeared in the commercial mortgage-backed securities (CMBS) market about twenty years ago, and it was found that the loans that had adopted this bankruptcy remote feature were rated more favorably by ratings agencies like Standard & Poor’s (S&P). Conventional institutional lenders, such as large insurance companies and pension funds, quickly determined that their loans would also be best served if they also had a bankruptcy remote nature.
     
    At times, the lender will require a Springing Member.  Unlike the Special Member or Independent Manager, the role of the Springing Member only arises when there is only a single member remaining in the LLC and that member ceases to remain a member for reasons such as that person’s death.  The Springing member “springs into action” and becomes a Special Member to avoid the LLC’s dissolution otherwise due to the fact that the last member ceased to be a member.

    Although these entities receive compensation on an annual basis for acting or remaining ready to act in their particular capacity, they have no interest in the profits or losses of the LLC and are not otherwise treated as a regular member.
    To learn more about special member, independent manager, and springing member services, contact Accruit by emailing info@accruit.com or calling (800) 237-1031 today!