Ric Moody's (ricmoody) Blog

In any type of building, residential or commercial, there are real estate components, such as the structure itself, and there are personal property components. Personal property is the IRS term for items that are "movable" such as light fixtures, carpeting and window coverings. These type of pers...

When Congress passed the Housing Assistance Act of 2008, their goal was to help those people who were losing their homes in foreclosure. One of the side effects of the bill, however, was a change that could affect taxation on the gain from the sale of YOUR personal residence. If you sell a primar...

With a typical 1031 exchange, you can sell your investment property without paying taxes when you purchase another investment property of equal or greater value. But, there's a hitch - you must sell your old property before you buy your new property within a strict 180-day time frame - in order t...

Clients considering the sale of investment or income property should first consult their financial or tax advisor to determine if a tax-deferred exchange will benefit their long-term investment goals and retirement plans. Ultimately, your client must decide whether to take advantage of an IRC Sec...

CAN MY CLIENT TAKE SOME CASH OUT WHILE STILL DOING AN EXCHANGE? Yes!  However, any cash received will be subject to capital gains tax. Your client may take cash out at the closing of the sale property or upon completion of the exchange. Since they will be taxed on any proceeds being removed from ...

AFTER THEY'VE CHOSEN A QI, THEN WHAT? Upon closing the sale of the relinquished property, your client must adhere to two timetables which both begin on the date the existing property is transferred. First, they must identify in writing possible replacement properties within 45 days of the closing...

HOW SHOULD MY CLIENT SELECT A QI? The Intermediary should be carefully chosen to ensure the exchange is defensible.  As a principal in the transaction, the Intermediary will have as much responsibility as the Exchangor for performance of contractual obligations in the selling and buying of proper...

WHEN AND HOW SHOULD MY CLIENT BEGIN THE EXCHANGE PROCESS? Your client must first select a Qualified Intermediary ("QI") to facilitate the exchange. A QI is a professional company that specializes in processing §1031 exchanges. The QI's services must be retained prior to the closing of the exisiti...

WHAT'S THE BENEFIT IF MY CLIENT WILL EVENTUALLY HAVE TO PAY THE TAXES ANYWAY? With proper estate planning, your client may never pay capital gains tax! There are many tax-planning vehicles that allow taxpayers to relinquish their low basis assets (such as real estate) without paying taxes. Gifts ...

WHAT IS CAPITAL GAINS TAX? - Currently the rate is 15% Capital gains is the difference between what a property sells for and the "adjusted basis" in the property. When investment property is purchased, the purchase price becomes the initial cost basis. If your client makes capital improvements to...