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  • Webinar: Advanced 1031 Exchange Exit Strategies

    Join Roy Pfleger of RVP II Consulting, and David Gorenberg, Managing Director of Accruit, as they discuss the basics of 1031 exchanges, and replacement property options including NNN, TICs, DSTs and more.
    Date: Tuesday, December 15th, 2020
    Time: 11:00 AM-12:00 PM EST
    Location: Online
     
     
    In this 1-hour webinar, you’ll: 

    Learn the basics of 1031 exchange, including the process and different types of exchanges
    Know how and why to leverage the benefits of 1031 exchange as it relates to various replacement property options, including NNN, TIC, DST, and oil and gas royalties.

    This webinar is presented in collaboration with RVP II Consulting

    https://js.hscta.net/cta/current.js”> hbspt.cta.load(6205670, ‘4c34c848-591e-41ae-967b-d613cad8e2f2’, {});
    About the Speakers: 
    Roy Pfleger II, Financial Consultant
    Roy has spent his entire career within the financial services sector. He began his journey at one of the country’s top John Hancock agencies as an intern. During his tenure at John Hancock and over the course of his career, Roy gained vast experience in financial services and excelled in management. Roy oversaw multiple branch offices locally and around the country. He had responsibilities in compliance, supervision, marketing, recruiting, day-to-day operations, administration, life insurance case management, business and investment processing, transitioning books of business and client accounts, and technology implementation.
    As the President and Owner of RVPII Consulting, Roy Pfleger set out to break the boundaries of the traditional financial services experience by incorporating his managerial and operational background. By using his knowledge and expertise, Roy focuses on guidance, accountability, and implementation of strategies, to share with his clients along their financial planning journey.
     
    David Gorenberg, Esq., CES ®, Managing Director, Accruit
    A dedicated and successful professional, David Gorenberg has over twenty years of experience in business development and public speaking. His dynamic personality enables him to make effective presentations to groups both large and small, at all professional levels. David has written and spoken extensively on 1031 Exchange transactions pursuant to Section 1031 of the Internal Revenue Code , and Tenant-In-Common (TIC) and Delaware Statutory Trust (DST) investment properties as like-kind replacement property solutions for 1031 Exchange transactions pursuant to IRS Revenue Procedure 2002-22 and Revenue Ruling 2004-86.
    Prior to joining Accruit, he was with Wilmington Trust, where he served as the Vice President and Product Leader for Wilmington Trust 1031 Exchange, LLC out of Wilmington, DE. Prior to that, he spent six years with Citibank’s 1031 operations, where he built their 1031 Exchange service from the ground up, ultimately generating over $850 million in annual deposits for the bank. In addition he has held leadership positions with three other national Qualified Intermediaries (Accommodators). Prior to becoming a full time Qualified Intermediary , David managed a successful law practice, where he was involved in business and real estate transactions. In that capacity, David has guided his clients through 1031 Exchange transactions since 1992.
     

  • Webinar: Advanced 1031 Exchange Exit Strategies

    Join Roy Pfleger of RVP II Consulting, and David Gorenberg, Managing Director of Accruit, as they discuss the basics of 1031 exchanges, and replacement property options including NNN, TICs, DSTs and more.
    Date: Tuesday, December 15th, 2020
    Time: 11:00 AM-12:00 PM EST
    Location: Online
     
     
    In this 1-hour webinar, you’ll: 

    Learn the basics of 1031 exchange, including the process and different types of exchanges
    Know how and why to leverage the benefits of 1031 exchange as it relates to various replacement property options, including NNN, TIC, DST, and oil and gas royalties.

    This webinar is presented in collaboration with RVP II Consulting

    https://js.hscta.net/cta/current.js”> hbspt.cta.load(6205670, ‘4c34c848-591e-41ae-967b-d613cad8e2f2’, {});
    About the Speakers: 
    Roy Pfleger II, Financial Consultant
    Roy has spent his entire career within the financial services sector. He began his journey at one of the country’s top John Hancock agencies as an intern. During his tenure at John Hancock and over the course of his career, Roy gained vast experience in financial services and excelled in management. Roy oversaw multiple branch offices locally and around the country. He had responsibilities in compliance, supervision, marketing, recruiting, day-to-day operations, administration, life insurance case management, business and investment processing, transitioning books of business and client accounts, and technology implementation.
    As the President and Owner of RVPII Consulting, Roy Pfleger set out to break the boundaries of the traditional financial services experience by incorporating his managerial and operational background. By using his knowledge and expertise, Roy focuses on guidance, accountability, and implementation of strategies, to share with his clients along their financial planning journey.
     
    David Gorenberg, Esq., CES ®, Managing Director, Accruit
    A dedicated and successful professional, David Gorenberg has over twenty years of experience in business development and public speaking. His dynamic personality enables him to make effective presentations to groups both large and small, at all professional levels. David has written and spoken extensively on 1031 Exchange transactions pursuant to Section 1031 of the Internal Revenue Code , and Tenant-In-Common (TIC) and Delaware Statutory Trust (DST) investment properties as like-kind replacement property solutions for 1031 Exchange transactions pursuant to IRS Revenue Procedure 2002-22 and Revenue Ruling 2004-86.
    Prior to joining Accruit, he was with Wilmington Trust, where he served as the Vice President and Product Leader for Wilmington Trust 1031 Exchange, LLC out of Wilmington, DE. Prior to that, he spent six years with Citibank’s 1031 operations, where he built their 1031 Exchange service from the ground up, ultimately generating over $850 million in annual deposits for the bank. In addition he has held leadership positions with three other national Qualified Intermediaries (Accommodators). Prior to becoming a full time Qualified Intermediary , David managed a successful law practice, where he was involved in business and real estate transactions. In that capacity, David has guided his clients through 1031 Exchange transactions since 1992.
     

  • Myth Busting 1031 Exchange – Separating Fact From Fiction

    1031 like-kind exchanges or tax deferred exchanges have been part of the United States tax code since 1921, yet they continue to be the subject of a number of misconceptions, some of which are addressed below.
    Myth: 1031 like-kind exchanges are only for the wealthy
    This misconception arises from the visibility that high-profile companies or individuals have when exchanging a large office building or rental property and deferring the tax on the sale of that property. What is being missed is that average everyday people are utilizing like-kind exchanges as well.
    A small business owner who owns his 25,000 sq ft warehouse can defer gain on the sale of that space when he uses the proceeds to purchase another building or even a piece of land. An individual who defers tax on selling a small rental property when she buys a replacement property is also taking advantage of Section 1031 of the tax code. These sorts of transactions made by small businesses and middle class investors are frequent, even if they don’t make the headlines.
    I had the opportunity to meet a teacher recently in Denver, Colorado who, upon learning about our company, related her own like-kind exchange story. She had purchased a rental home four years ago for a terrific price, and when the market went up, she was able to enter into a contract to sell it for a profit. She was lucky to have a smart accountant who advised her to structure the transaction as an exchange with a qualified intermediary enabling her to reinvest all of the proceeds in another rental, thereby deferring tax on the sale. She did so and has now profited enough to secure a down payment on three rental properties, about which she remarked, “On a teacher’s salary, without 1031s, I would never have been able to own three rentals.”
    Myth: A 1031 exchange must be simultaneous
    When the tax code was first added in 1921, all exchanges were simultaneous. Over time, the 1031 exchange deadlines, but the 180-day completion period allows for non-simultaneous exchanges. It is even possible, in a stimulate economic growth. They are an

  • Myth Busting 1031 Exchange – Separating Fact From Fiction

    1031 like-kind exchanges or tax deferred exchanges have been part of the United States tax code since 1921, yet they continue to be the subject of a number of misconceptions, some of which are addressed below.
    Myth: 1031 like-kind exchanges are only for the wealthy
    This misconception arises from the visibility that high-profile companies or individuals have when exchanging a large office building or rental property and deferring the tax on the sale of that property. What is being missed is that average everyday people are utilizing like-kind exchanges as well.
    A small business owner who owns his 25,000 sq ft warehouse can defer gain on the sale of that space when he uses the proceeds to purchase another building or even a piece of land. An individual who defers tax on selling a small rental property when she buys a replacement property is also taking advantage of Section 1031 of the tax code. These sorts of transactions made by small businesses and middle class investors are frequent, even if they don’t make the headlines.
    I had the opportunity to meet a teacher recently in Denver, Colorado who, upon learning about our company, related her own like-kind exchange story. She had purchased a rental home four years ago for a terrific price, and when the market went up, she was able to enter into a contract to sell it for a profit. She was lucky to have a smart accountant who advised her to structure the transaction as an exchange with a qualified intermediary enabling her to reinvest all of the proceeds in another rental, thereby deferring tax on the sale. She did so and has now profited enough to secure a down payment on three rental properties, about which she remarked, “On a teacher’s salary, without 1031s, I would never have been able to own three rentals.”
    Myth: A 1031 exchange must be simultaneous
    When the tax code was first added in 1921, all exchanges were simultaneous. Over time, the 1031 exchange deadlines, but the 180-day completion period allows for non-simultaneous exchanges. It is even possible, in a stimulate economic growth. They are an

  • Myth Busting 1031 Exchange – Separating Fact From Fiction

    1031 like-kind exchanges or tax deferred exchanges have been part of the United States tax code since 1921, yet they continue to be the subject of a number of misconceptions, some of which are addressed below.
    Myth: 1031 like-kind exchanges are only for the wealthy
    This misconception arises from the visibility that high-profile companies or individuals have when exchanging a large office building or rental property and deferring the tax on the sale of that property. What is being missed is that average everyday people are utilizing like-kind exchanges as well.
    A small business owner who owns his 25,000 sq ft warehouse can defer gain on the sale of that space when he uses the proceeds to purchase another building or even a piece of land. An individual who defers tax on selling a small rental property when she buys a replacement property is also taking advantage of Section 1031 of the tax code. These sorts of transactions made by small businesses and middle class investors are frequent, even if they don’t make the headlines.
    I had the opportunity to meet a teacher recently in Denver, Colorado who, upon learning about our company, related her own like-kind exchange story. She had purchased a rental home four years ago for a terrific price, and when the market went up, she was able to enter into a contract to sell it for a profit. She was lucky to have a smart accountant who advised her to structure the transaction as an exchange with a qualified intermediary enabling her to reinvest all of the proceeds in another rental, thereby deferring tax on the sale. She did so and has now profited enough to secure a down payment on three rental properties, about which she remarked, “On a teacher’s salary, without 1031s, I would never have been able to own three rentals.”
    Myth: A 1031 exchange must be simultaneous
    When the tax code was first added in 1921, all exchanges were simultaneous. Over time, the 1031 exchange deadlines, but the 180-day completion period allows for non-simultaneous exchanges. It is even possible, in a stimulate economic growth. They are an

  • Don’t Select Just Any QI, Here’s How to Choose the Right One

    Choosing a local Qualified Intermediary (QI) is an important decision, and as such, the process shouldn’t be taken lightly. After all, your QI will be guiding you through a maze of federal and state requirements as well as safeguarding the proceeds from the sale of your relinquished property. Given the potential tax consequences involved with an improperly structured exchange and the safety issues related to your proceeds, a true due diligence approach should be taken before committing to a QI.
    To begin, let’s take a quick look at some of the QI’s responsibilities:

    Structuring the exchange
    Preparing the related documentation
    Safeguarding proceeds from the sale of the relinquished property(s)
    Continuous monitoring and advising to ensure compliance with federal and state 1031 and QI requirements

    It’s important to note that there is currently no federal regulation of qualified intermediaries. However, with the help of the Federation of Exchange Accommodators (FEA), a number of states, including Colorado, have begun taking the lead in assuring higher professional standards for QIs. Some of the newly enacted requirements (which can vary from state to state) include:

    Qualified escrow and/or trust accounts for client funds
    Minimum bond and insurance requirements
    Fund withdrawal authorization requirements
    Registration and licensing requirements for QIs
    Investment limitations on exchange proceeds

    These are just some of the new state level regulatory requirements for QIs, and Accruit has taken a leadership role in making sure that legislators are fully informed in order to properly protect exchangers. However, our responsibility to inform doesn’t stop there. It also includes educating the marketplace to ensure the right due diligence is performed prior to choosing a QI. Items we advise businesses to research include:

    The QI’s technical expertise and experience
    Banking processes and guidelines
    Certified Exchange Specialist® (CES®) on staff
    Quality control
    Insurance and bonding coverage
    Employee recruitment (including background checks with continuous monitoring)
    Membership in the FEA
    Applicability and QI’s status related to relevant state regulatory requirements
    References

    This article is merely intended to start a discussion regarding the importance of choosing the right QI locally. In practical terms, the process should be far more in-depth and you should include a trusted tax advisor as part of your decision team.
    Working with an independent Qualified Intermediary provides benefits you may not have considered. Learn why working with Accruit is different than QI’s who are a part of a larger entity. 

    https://js.hscta.net/cta/current.js”> hbspt.cta.load(6205670, ’41c260a7-a37c-4ff2-a7a7-f7e36768feb6′, {“useNewLoader”:”true”,”region”:”na1″});
     
     

  • Don’t Select Just Any QI, Here’s How to Choose the Right One

    Choosing a local Qualified Intermediary (QI) is an important decision, and as such, the process shouldn’t be taken lightly. After all, your QI will be guiding you through a maze of federal and state requirements as well as safeguarding the proceeds from the sale of your relinquished property. Given the potential tax consequences involved with an improperly structured exchange and the safety issues related to your proceeds, a true due diligence approach should be taken before committing to a QI.
    To begin, let’s take a quick look at some of the QI’s responsibilities:

    Structuring the exchange
    Preparing the related documentation
    Safeguarding proceeds from the sale of the relinquished property(s)
    Continuous monitoring and advising to ensure compliance with federal and state 1031 and QI requirements

    It’s important to note that there is currently no federal regulation of qualified intermediaries. However, with the help of the Federation of Exchange Accommodators (FEA), a number of states, including Colorado, have begun taking the lead in assuring higher professional standards for QIs. Some of the newly enacted requirements (which can vary from state to state) include:

    Qualified escrow and/or trust accounts for client funds
    Minimum bond and insurance requirements
    Fund withdrawal authorization requirements
    Registration and licensing requirements for QIs
    Investment limitations on exchange proceeds

    These are just some of the new state level regulatory requirements for QIs, and Accruit has taken a leadership role in making sure that legislators are fully informed in order to properly protect exchangers. However, our responsibility to inform doesn’t stop there. It also includes educating the marketplace to ensure the right due diligence is performed prior to choosing a QI. Items we advise businesses to research include:

    The QI’s technical expertise and experience
    Banking processes and guidelines
    Certified Exchange Specialist® (CES®) on staff
    Quality control
    Insurance and bonding coverage
    Employee recruitment (including background checks with continuous monitoring)
    Membership in the FEA
    Applicability and QI’s status related to relevant state regulatory requirements
    References

    This article is merely intended to start a discussion regarding the importance of choosing the right QI locally. In practical terms, the process should be far more in-depth and you should include a trusted tax advisor as part of your decision team.
    Working with an independent Qualified Intermediary provides benefits you may not have considered. Learn why working with Accruit is different than QI’s who are a part of a larger entity. 

    https://js.hscta.net/cta/current.js”> hbspt.cta.load(6205670, ’41c260a7-a37c-4ff2-a7a7-f7e36768feb6′, {“useNewLoader”:”true”,”region”:”na1″});
     
     

  • Don’t Select Just Any QI, Here’s How to Choose the Right One

    Choosing a local Qualified Intermediary (QI) is an important decision, and as such, the process shouldn’t be taken lightly. After all, your QI will be guiding you through a maze of federal and state requirements as well as safeguarding the proceeds from the sale of your relinquished property. Given the potential tax consequences involved with an improperly structured exchange and the safety issues related to your proceeds, a true due diligence approach should be taken before committing to a QI.
    To begin, let’s take a quick look at some of the QI’s responsibilities:

    Structuring the exchange
    Preparing the related documentation
    Safeguarding proceeds from the sale of the relinquished property(s)
    Continuous monitoring and advising to ensure compliance with federal and state 1031 and QI requirements

    It’s important to note that there is currently no federal regulation of qualified intermediaries. However, with the help of the Federation of Exchange Accommodators (FEA), a number of states, including Colorado, have begun taking the lead in assuring higher professional standards for QIs. Some of the newly enacted requirements (which can vary from state to state) include:

    Qualified escrow and/or trust accounts for client funds
    Minimum bond and insurance requirements
    Fund withdrawal authorization requirements
    Registration and licensing requirements for QIs
    Investment limitations on exchange proceeds

    These are just some of the new state level regulatory requirements for QIs, and Accruit has taken a leadership role in making sure that legislators are fully informed in order to properly protect exchangers. However, our responsibility to inform doesn’t stop there. It also includes educating the marketplace to ensure the right due diligence is performed prior to choosing a QI. Items we advise businesses to research include:

    The QI’s technical expertise and experience
    Banking processes and guidelines
    Certified Exchange Specialist® (CES®) on staff
    Quality control
    Insurance and bonding coverage
    Employee recruitment (including background checks with continuous monitoring)
    Membership in the FEA
    Applicability and QI’s status related to relevant state regulatory requirements
    References

    This article is merely intended to start a discussion regarding the importance of choosing the right QI locally. In practical terms, the process should be far more in-depth and you should include a trusted tax advisor as part of your decision team.
    Working with an independent Qualified Intermediary provides benefits you may not have considered. Learn why working with Accruit is different than QI’s who are a part of a larger entity. 

    https://js.hscta.net/cta/current.js”> hbspt.cta.load(6205670, ’41c260a7-a37c-4ff2-a7a7-f7e36768feb6′, {“useNewLoader”:”true”,”region”:”na1″});
     
     

  • Final Treasury Regulations Provide Clarity and Favorable Treatment to Definition of Like-Kind of Real Estate Components

    Most people are aware that the federal tax law changed at the beginning of 2018 due to the passage of the Tax Cuts & Jobs Act. Some of the significant changes included reducing the capital gain rates and lowering tax rates on corporations. Among other things June of 2020, the IRS put out proposed regulations on the subject. Essentially, each component had to be analyzed separately to determine whether it was land, an inherently permanent structure, or a structural component of an inherently permanent structure. Land was rather clear but some of the other determinations were difficult to make. For instance, in regard to a component of a structure, the determination was largely based upon function. An example in the regulations referenced different treatment for a gas line that serviced the property generally for heating purposes, compared to a gas line that was used for cooking food that was served by the business. The former was considered part of the real estate for exchange purposes and the latter being used towards the “production of income” and therefore not so. Furthermore, the proposed regulations suggested that reference to local law characterization would not be taken into consideration. This was a departure from prior analyses where local law was a significant part of the determination.
    In any event, the IRS took into consideration the significant amount of feedback received and changed the final regulations in favorable ways. Under the final regulations, the asset is considered real estate if (i) it is specifically listed as such in the regulations or (ii) if it is real estate under state or local law and last (iii) if it is “considered real property based on all the facts and circumstances under the various factors provided in the final regulations.”
    It should be worth noting that the classification of an asset for exchange purposes is not determinative of its classification for other purposes such as taking of depreciation. The asset can be considered real estate for one purpose and personal property for another.
    The final regulations introduced another favorable rule. After personal property exchanges were disallowed, if exchange funds were directed to a closing for the purchase of replacement property whose purchase price included a personal property component, the exchange could be put at risk. This was seen as an unpermitted use of exchange funds on the part of the taxpayer which, in turn, violated the entire exchange. To provide a solution to this dilemma, the service borrowed on a provision from the original exchange regulations regarding the identification of personal property that was typically incidental to the real property. Examples are office furnishings in the purchase of an office building or hotel furnishings with the purchase of the hotel. This rule, known as the “incidental property rule” states that the personal property did not have to be separately identified from the real property but must be incidental to the real replacement property, having an aggregate fair market value not greater than 15% of the fair market value of the real estate, and must typically be transferred with the real property in a standard commercial transaction. Under the final regulations should part of the purchase price of the real estate include the value of personal property fitting this definition, it will not be considered “actual or constructive” receipt of the funds by the taxpayer otherwise compromising the exchange.
    Again, it should be noted that this rule pertains to avoiding a taxpayer getting boxed in when a real estate purchase includes some customary personal property that is not being paid for separately. However, that is not to say that it is disregarded nor considered part of the real estate for gain purposes. It still retains its character as non like-kind property compared to the original sale of real estate.
    If you have questions about an exchange that includes property as described above, please get in touch with one of our subject matter experts to discuss your situation specifically.
     

    https://cta-redirect.hubspot.com/cta/redirect/6205670/959852e4-dc2a-419… alt=”Questions about an exchange? Contact us.” class=”hs-cta-img” id=”hs-cta-img-959852e4-dc2a-4190-b67f-4cc1ed13478a” src=”https://no-cache.hubspot.com/cta/default/6205670/959852e4-dc2a-4190-b67…; style=”border-width:0px;” />https://js.hscta.net/cta/current.js”> hbspt.cta.load(6205670, ‘959852e4-dc2a-4190-b67f-4cc1ed13478a’, {});

  • Final Treasury Regulations Provide Clarity and Favorable Treatment to Definition of Like-Kind of Real Estate Components

    Most people are aware that the federal tax law changed at the beginning of 2018 due to the passage of the Tax Cuts & Jobs Act. Some of the significant changes included reducing the capital gain rates and lowering tax rates on corporations. Among other things June of 2020, the IRS put out proposed regulations on the subject. Essentially, each component had to be analyzed separately to determine whether it was land, an inherently permanent structure, or a structural component of an inherently permanent structure. Land was rather clear but some of the other determinations were difficult to make. For instance, in regard to a component of a structure, the determination was largely based upon function. An example in the regulations referenced different treatment for a gas line that serviced the property generally for heating purposes, compared to a gas line that was used for cooking food that was served by the business. The former was considered part of the real estate for exchange purposes and the latter being used towards the “production of income” and therefore not so. Furthermore, the proposed regulations suggested that reference to local law characterization would not be taken into consideration. This was a departure from prior analyses where local law was a significant part of the determination.
    In any event, the IRS took into consideration the significant amount of feedback received and changed the final regulations in favorable ways. Under the final regulations, the asset is considered real estate if (i) it is specifically listed as such in the regulations or (ii) if it is real estate under state or local law and last (iii) if it is “considered real property based on all the facts and circumstances under the various factors provided in the final regulations.”
    It should be worth noting that the classification of an asset for exchange purposes is not determinative of its classification for other purposes such as taking of depreciation. The asset can be considered real estate for one purpose and personal property for another.
    The final regulations introduced another favorable rule. After personal property exchanges were disallowed, if exchange funds were directed to a closing for the purchase of replacement property whose purchase price included a personal property component, the exchange could be put at risk. This was seen as an unpermitted use of exchange funds on the part of the taxpayer which, in turn, violated the entire exchange. To provide a solution to this dilemma, the service borrowed on a provision from the original exchange regulations regarding the identification of personal property that was typically incidental to the real property. Examples are office furnishings in the purchase of an office building or hotel furnishings with the purchase of the hotel. This rule, known as the “incidental property rule” states that the personal property did not have to be separately identified from the real property but must be incidental to the real replacement property, having an aggregate fair market value not greater than 15% of the fair market value of the real estate, and must typically be transferred with the real property in a standard commercial transaction. Under the final regulations should part of the purchase price of the real estate include the value of personal property fitting this definition, it will not be considered “actual or constructive” receipt of the funds by the taxpayer otherwise compromising the exchange.
    Again, it should be noted that this rule pertains to avoiding a taxpayer getting boxed in when a real estate purchase includes some customary personal property that is not being paid for separately. However, that is not to say that it is disregarded nor considered part of the real estate for gain purposes. It still retains its character as non like-kind property compared to the original sale of real estate.
    If you have questions about an exchange that includes property as described above, please get in touch with one of our subject matter experts to discuss your situation specifically.
     

    https://cta-redirect.hubspot.com/cta/redirect/6205670/959852e4-dc2a-419… alt=”Questions about an exchange? Contact us.” class=”hs-cta-img” id=”hs-cta-img-959852e4-dc2a-4190-b67f-4cc1ed13478a” src=”https://no-cache.hubspot.com/cta/default/6205670/959852e4-dc2a-4190-b67…; style=”border-width:0px;” />https://js.hscta.net/cta/current.js”> hbspt.cta.load(6205670, ‘959852e4-dc2a-4190-b67f-4cc1ed13478a’, {});