All Forum Posts by: Buddy Holmes

@Jay Hinrichs, Life is Good!

@Eric Smathers, I too am looking for a TAX/CPA who is up to speed in REI clients.

In a google search I found a Christopher Moss and Benjamin Scott both in MtP. Again I have not used either but both seem to say they are knowledgeable in REI. I would appreciate feed back if you try them or anyother. Cheers, Buddy

@Dave Foster, thanks for your thoughts.  There is no condemnation (i hope they don't change there mind)   It is raw land going to be used as a nature park.    That's a good idea I will rung it by my agent. Cheers, Buddy

@Chase Webster,  Interesting Question.  One way to look at it is to consider how long your tour in Japan might be.  If only 2 years or so, then you could try renting for the two years and still sell it tax free in that you would have been resident for 2 of the last 5 years.

If 3 years or more then I would sell it tax free and try to use the cash to get a better cash flow rental.

Cheers,

Buddy

@Bill Exeter might be of more help.  Not sure why my @Bill didn't work?

@John Mano, I am just a REI who has done one 1031 via turboTax. I recommend you get advice from a tax CPA type for sure.

1) I think it definitely qualifies for a 1031 eXchange.  I assume you know to involve the QI and send all proceeds to the QI when you sell it.

2) The 1031 will require that your buy of a replacement property be => than the expected $250k less sales expenses.  The new Basis is a fairly complicated calculation but the only significant deduction should be the amount of depreciation on the 40k value of the rental during the 3 years that you rented it.  Perhaps Uncle Sam might say 4 years worth if you claimed it on 4 years of returns.

3) if your 50k profit number is about right then this might increase your roll over to maybe 55k and you do not pay any capital gains.   Your 100K of improvements is counted in the process.

The numbers don't seem to add up for what you have given in that 40K buy+100K improvements =140k into the property and sale for 250K only gives you 50K gain???   Seems like it should be $110k.  In any case do the 1031, be careful with the steps and times for ID of replacement property and close on replacement property.  Your QI should give you details and keep you on the straight and narrow.

Cheers,

Buddy

@Girard Walters, I highly recommend geting a copy of @Scott Trench,s book "Set for Life"!

It addresses your question exactly and is an excellent read.  

Let us know how it goes in a month or so!

Cheers,

Buddy

This is my second 1031 exchange, however this one is unique.

I have a contract to sell a property to a City and I want to enter into a 1031 sale.

Since my buyer is a city/town with a town counsel and funding options that also include a joint funding with the county, my sales contract has a wide range of closing date: from now until the end of September. I am told that with a fiscal year starting July 1 that the real spread is 1 July to 30 September. My plan is to exchange this property for one SFR cash purchase and the rest in DST investments. The problem as you might image, is that it is hard to find a SFR to put under contract until I know the closing date on my first property sale.

I would appreciate any thoughts in how to work earlier on finding and contracting on the SFR replacement property.

@Bill Exeter, Great thought.  You are absolutely correct.  Flexibility in the closing date is a great incentive to offer  to put you in a better position with the seller!  

I am presently working my second 1031 Exchange and my buyer has a wide window for closing due to being a City working it funding issues.  As a result, I am in limbo until I have afirm closing date to start the timed periods.

@Adam R.,

I have only done one 1031, but I don't see much you could do for you offer that would affect the 1031 seller anymore that any buyer/seller deal.  There can not be any seller financing but seller paying closing costs is OK.  I can't see any advantages for you knowing that the seller plans a 1031 exchange.  His 1031 exchange will not hurt you in any way either.  Perhaps other can find a benefit for you.